Top traits of top performing cereals and oilseeds farms

We examined outstanding cereals and oilseeds farming businesses and what sets them apart from the rest. While ranking common themes is difficult as their impacts vary from farm to farm, for a general perspective of importance overall, the following order is identified with some related real-life examples of actions farmers are taking. 

• Minimise overhead costs
• Spend money on variable costs that increase output
• Set goals and budgets
• Compare yourself and gather information
• Focus on detail
• Have a mindset for change

This is the strongest message of this analysis, the same as it was in the 2018 paper.

Higher performing farms in the Farm Business Survey (FBS) study had lower overheads than the rest. No farmer can operate in the top performing quartile without managing cost control, we can be absolute here. Cereals and oilseeds are commodities. Commodities are, by definition, goods that are produced with low margins so to make the business model work, they should be produced in high volume. If you cannot produce enough commodity to cover the costs and generate a sufficient return, then additional value should be sought.

Make it a daily routine to seek cost savings that don’t affect turnover. Collaborate with neighbouring farms and businesses, keep machinery longer and maintain it well, develop and train staff, they are a critical resource. Keep necessary staff and machines and no more. Ideas on how to cut costs are almost endless. Make a list of 50 ways to trim costs. If every idea saves you 1% of your costs, your business will be transformed.

“Since David has taken over, there has been substantial investment in the farmyard. Wide concrete roads replaced the farm track, modern, impressive-looking grain stores have been built and manicured lawns created to provide an eye-catching entry for visitors and neighbours. Peter’s focus was on the return from an investment, but David is a man of appearances and to him, it matters how the farm looks to outsiders. The yard is certainly impressive, it looks expensive, but it has come at considerable cost and offers minimal financial gain.”

Manor Farm, Bottom Performer

If you can increase the yield, or its likely sale value, by spending less money than the likely increase in value, then that is good business. This is generally by spending money wisely on variable costs.

Make it clear to your advisors what your strategy is. By reducing machinery costs, you might take longer to apply something, but by looking after your soil, this will accelerate the return to fieldwork after extreme weather conditions. Cross examine your agronomists and find out exactly why they recommend a treatment. Buy your inputs carefully, every few pounds you save will soon add up.

“Agronomic advice is sourced either via a local independent agronomist or through George as he is BASIS qualified. Chemicals are purchased through buying groups and spot bought to try and get the best deals for active ingredients. Chemical spend for winter milling wheat in 2022 was £260/ha demonstrating they are not the lowest spenders but the cost is diluted over a substantial yield/ha.”

Oak Tree Farm, Top Performer

Speak with business partners and family members. Discuss what each wants to achieve (financial and non-financial). Make sure your aspirations are aligned. If you don’t have this discussion, you will not know for sure. Write them down, pin them up, discuss them regularly. Share them with your business advisor. Work out a plan how to achieve your mutual goals.

Compile annual budgets to show where the year is planned to go. You can identify what is going well and what not so well helping you to adjust things if necessary. Ideas can be tested using this tool. Think through contingencies by developing a risk plan. Quantify risk. Entrepreneurs don’t take higher risks than others, they just understand them better so know what they can do safely. Others guess and are sometimes wrong so make less progress or don’t act in case they are wrong, guaranteeing no progress. Use these schedules regularly and frequently.

Without a goal or ambition, you will not know if you have achieved what you are working towards.

“The AHA tenancy land is on historically low rents of around £40/hectare (100/acre), which is an advantage of the business. However, due to strong demand within the area, FBT land rents are currently over £200/acre which offsets a large proportion of the low rental AHA land. Unlike many farm businesses, every acre of Oaktree Farm incurs annual rental charges. Philip believes this helps the business maintain high standards and good technical performance as the land must generate large enough returns to cover all variable costs, overheads and rents before any profits are made.”

Oak Tree Farm, Top Performer

Farms with access to more information and act on it make more money. It could be through benchmarking, discussion groups, informal discussions, regular reading (not just farming press), farm walks or a combination of all the above. Critically, taking that information to the farm to identify what you can do to farm more profitably is what matters. Knowledge is only useful if you change something as a response. Look to invest knowledge into smarter farming.

“The farm sources its agronomic advice and agrochemicals from one input supplier. This also simplifies the system. He knows this works for his neighbours, but he does not discuss inputs with his advisor like they do, he just takes his advice without question. Variable costs on Manor Farm are nearly 25% higher than his neighbouring farms. David is unaware of his high cost base due a lack of data recording and a reluctance to benchmark as he does not wish to share his data with other businesses.”

Manor Farm, Bottom Performer

The study recognised that forward thinking farmers, that are prepared to structure their businesses for the future will outperform those that don’t. Look at the direction your business is currently going and consider if it needs any readjustment. Does your current business model fit neatly with how policies are changing, how consumers are changing, how your family is growing up and how you are maturing? Consider the future finances, leisure, inheritance opportunities, fertility building, diversification and so on.

A change in the market conditions might make you more (or less) money one year, but it will not necessarily change your performance quartile as a rising tide lifts all boats. To achieve that aspiration, requires change. Nobody should do the same thing and expect different results. Yet more people regret inactivity or indecisiveness than those who regret doing something.

Ultimately, success is about achieving what the individual aspires to achieve. This might not be financial aspirations which have been considered here, but to achieve most things with a farm, financial sustainability is a necessity.

“Across the farm, a low disturbance system has been adopted. This is centred around a shallow disc cultivator used to chit weeds and volunteers, a low disturbance subsoiler for the removal of compaction and a trailed disc drill. The business benefits from large field sizes which allows for a higher work rate than most farming operations. A plough based system was retired many years ago due to the nature of the soils on Oaktree. The business achieves consistently good yields without one and George states the benefits were outweighed by the significant amounts of fuel, metal and labour required to turn over the land and subsequently break down the clods.”

Oak Tree Farm, Top Performer