Performance is key in post-Brexit world

Friday, 28 September 2018

Many of us in the industry have been scouring the Agricultural Bill for the shape of things to come in the post-Brexit world. What is clear is that direct payments will be diminishing, before disappearing completely (at least in England). For me it means that performance on farm and our ability to get returns from the market become even more critical in our success.

It’s something that we’ve been looking at in detail over recent months at AHDB, and we’ve now identified eight key characteristics of farms in the top-performing 25 per cent.

In our latest Horizon report we outline the steps for success in each of these factors, such as minimising overhead costs and making sure you have a plan and long-term goals for your business. The findings may be familiar – we have all heard similar messages, whether from farm advisers, bank managers or fellow farmers. More importantly, these eight characteristics are within our control on farm, unlike market prices and trade agreements.

When we looked at what the financial difference in performance is between farms with similar characteristics, taking into account overheads, variable costs and agricultural output, we’ve seen top performers making three or more times more than those in the bottom quartile. This would equate to an average difference of around £100,000 a year for cereals and oilseeds, dairy, pork, horticulture and potato sectors and around £50,000 a year for beef and lamb.

Making performance improvements doesn’t have to be about heavy capital investment.  More often it’s about doing a range of things well and reaping the benefit from many interdependent ‘tweaks’.

And for some, this report could simply be a reminder of best practice already being undertaken on thousands of farms across the country. For others it gives a base from which to start addressing factors that would place them in a stronger, more independent, position. With case studies and evidence, it’s a reference point for farmers wanting to take a fresh look at their businesses to ensure it is ‘fit for the future’.

Throughout the year, we all make thousands of decisions – whether in the day-to-day running of a business or those more strategic in nature. Regardless of the policy environment, there are opportunities to strive for incremental improvements over a range of parameters to get your business and across all of the sectors as a whole in the best possible shape to take on the change.

Our new Horizon report emerged from the widely-read AHDB Brexit Impact Assessments, which we released last year. It was commissioned to answer the common question that arose from the last report – what is it that top-performing farms do differently? And to provide farmers and growers with more information to help them focus their efforts. We hope that it does that for you and continues to provide the groundwork needed to strengthen our industry into Brexit and beyond.

The latest report and other resources can be downloaded from ahdb.org.uk/Brexit