Award-winning sheep and beef producer Dafydd Parry Jones has been benchmarking for more than a decade. He says it has taught him how to cut costs, be more efficient and still have time left over for his family.
This article follows the publication of the results of a Farmers Guardian survey on benchmarking. Commissioned by HSBC, more than 200 farmers took part in the research.
Organic farmer Dafydd Parry Jones, who farms 750 sheep and 70 suckler cows near Machynlleth, Mid Wales, says: “Unless you look at your business, you do not know what to change.”
Mr Jones has won several national grassland, sheep and beef awards over the years and says he would not have been able to without knowing his figures.
He says: “I think I have been shaping my business for the last 10 years using benchmarking. We have done a lot of tweaking to get to our current system and benchmarking has become part of what we do.
“What I have learned is that it is not about the amount I produce, but it is about looking after costs and finding the level of production that is right for you.
“By doing benchmarking, you can identify the problems in your business and why certain parts are not making money.”
Keeping a handle on his numbers and sticking to a simple grass-based system allows him to keep costs down and efficiencies up, says Mr Jones. As a result, he is achieving a profit margin of 50 per cent of turnover.
“If you understand your costs, you can see what is keeping your business back from producing more cash.”
Mr Jones does not use software for benchmarking, as everything is done on paper. By analysing his figures, he has identified areas for cost reduction.
He says: “We are very aware of our labour, feed and fertiliser costs. But through benchmarking and
making changes, we have been able to reduce all of these.”
As an organic farmer, concentrates can be as high as £450/tonne, so since 2014 he has switched to
producing red clover silage instead. To reduce labour costs, he has invested in technology and other time and labour saving inventions, working smarter, rather than harder.
He also shares his machinery with his brother on a neighbouring farm, cutting his machinery costs in half.
Mr Jones works with a benchmarking group as part of the Welsh Farm Business Survey run by the University of Aberystwyth. Previously he was part of two Waitrose groups.
He says seeing other farmers’ data allows him to compare his costs, profits and losses and he has picked up useful tips too.
He says: “Everybody is in the same boat. In a group, everyone has good and bad points, so you can share and learn from people’s good practice.
“Sometimes doing it your own way is better. And by talking to people, you can find different ways to do things.”
Mr Jones says: “I like to think of my farm as a business and a way of life; benchmarking has helped me do that.”
With that in mind, he ensures he has a good work-life balance and likes to get off the farm at weekends with his wife and children.
He does not want his children to grow up seeing farming as unappealing. He says: “I do not want them to see their parents toiling all hours and making no money.”
Benchmarking helps him know where to invest for the future and be more confident, because he has figures to back him up.
He says: “Without them, I would not know if I was doing the right thing. If I go back 10 years, I know I have learned a lot. When you farm, you often do the same as the year before, but I think all businesses can improve.
“There are a lot of changes coming up [in farming], but I feel pretty confident for the future. We have a quality product and there is a market for it.”