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Pursuing scale may not be the key to arable farming profitability

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Scale may not be the key to arable farming profitability

Pursuing scale just for the sake of it is not a sensible option.

 

It was more about finding an efficient level of scale, said David Siddle, director of Andersons Northern, when he spoke at the annual conference of Scottish Agronomy in Perth.

 

“We are increasingly seeing larger arable businesses questioning their business models,” he said. “These questions generally focus on two points – input costs and scale of operations.”

 

Andersons figures showed input costs had soared over a decade.


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The annual fertiliser spend for winter wheat in 2007/08 was £107 per hectare but it had risen to £186 by 2016/17.

 

Over the same period crop protection had increased from £127 per hectare to £217. In both cases this was well above inflation.

 

Focus

“Taking good, cost effective agronomy decisions helps to make the most of these inputs. The focus has to be on sustainable rotations, proportionate labour and machinery costs and selecting which land to crop,” Mr Siddle said.

 

There was a perception, he added, that scale was the key to profitability but rents could be too high on extra ground and the arrangements too short term.

 

This could lead to a drive to crop every square metre of land, no matter the quality and a ’broad- brush’ approach to inputs with high cost prophylactic crop protection regimes adopted as standard rather than using a targeted approach.

 

“Remember too that large scale machinery might be required at a time when machinery prices have risen by 20 per cent over five years,” he said.

“Technologies such as sensors, data capture and machine learning would help drive efficiencies on large scale units but they will take time to filter through and I do not see them as the answer at the moment.”

 

Scottish Agronomy provides advice to 210 members farming more than 51,000 hectares of arable crops across the country.

 

Chairman Thomas Pate estimated the agronomy team were responsible for advising on £55m of inputs for cereals and £30m of inputs for potatoes on an annual basis.

 

Trails work carried out by the co-operative for third party companies brought in £800,000 of income for combinable crops and £130,000 for potatoes.

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