Monday, 25 February 2019
By Phil Bicknell, AHDB Market Intelligence Director
Talking about the future of farming amid so much uncertainty is a challenge to say the least. Google 'Brexit clarity' and you'll get 7.7 million results. Do the same with 'Brexit uncertainty' and you'll get over 49 million helpful suggestions to digest. For any farming business, making sense of the situation is a challenge.
Yet three things are clear to me. UK farming is going to get less (or rather no) direct support, we're going to be more reliant on understanding and meeting the needs of the marketplace; and we're going to see ourselves exposed to more global competition. These are all trends that were happening before Brexit - it just means we get there a lot quicker.
As farmers, we can focus on what's in our control (rather than the policy issues that aren't) and look at our own businesses. There are 8 key factors that mark out the top-performing, most profitable businesses but I want to flag three key areas I find myself talking about most regularly.
How do you measure up?
As an individual farm business, how do your costs of production compare to others? What overheads are you carrying? How are you performing against your goals or budgets?
As farmers, we have a whole host of information relating to performance, whether physical of financial. Just thinking in terms of horsepower per hectare or feed costs per litre might help you identify strengths and ultimately trigger some different thinking. AHDB's Farmbench helps you do just that and the good news is it launches shortly.
Having a mindset for change and innovation
We're a traditional industry and while we all know the world doesn't stand still, it's easy to keep on doing what you've always done - I speak from experience. How do you get new ideas? How do you take on board inspiration? I'm fortunate in that my job means I get to see some really good things happening on farms. I think it's why those farmers that get really involved in AHDB's Strategic and Monitor Farms programme speak so highly of it - they'll talk of sharing information or seeing and hearing best practice. When they're more candid, they might mention pinching ideas and getting the benefit of someone else's trial and error. Regardless, if it helps change and improves performance, it works.
Understand the market
To say we're an industry that produces first and then works out how to sell it is an exaggeration. But on the whole, there's a tendency to focus on transaction rather than trust. We probably talk price rather than value. And providing what the consumer wants is someone else's job. Yet the value of talking to the person likely to buy your goods on farm is higher than ever. Knowing exactly what to produce might be a relatively straightforward conversation or it could be highly complex. But recognising what is of greatest value to them is critical to adding value to both parties and to keeping costs down. Closer integration to fully understand the level of service, quality and price that the supply chain requires will make the farm stand out as one to rely on, potentially then making it even more valuable. It's one thing we can do to help differentiate ourselves from the low-priced competition heading our way.
Brexit means that our industry moves out from under the protectionist blanket of the EU. This creates risk but we shouldn't forget that it also creates opportunities. What we produce matters: 3 meals a day, 365 days a year - that's 1095 opportunities a year for each person to consume what UK farming produces.