13th December 2011

Caithness and Sutherland Monitor Farm opens books to show jump in margins

Caption: Johnny MacKenzie, Caithness and Sutherland Monitor Farmer

Ensuring a decent margin for your business is the key to most business survival, so the Caithness and Sutherland Monitor Farm opened the books to see if their margins had improved. 

Feedback from those who volunteer to go on the monitor farm programme is generally positive. Putting the detailed running of your holding under the scrutiny of your peers and industry experts can be a stressful business. But most, if not all, who have taken part are generally happy with the new ideas that emerge which also can benefit other producers in the area. 

Few can have been as satisfied as Caithness farmer Johnny MacKenzie. 

Changes to his operation at Westfield Farm, six miles west of Thurso, are being credited with helping move his cattle operation into profit over the past year. His farm is the northernmost chosen for the monitor programme, which is supported by Quality Meat Scotland (QMS), the Scottish Government and local agricultural businesses.

The financial breakdown for his livestock business was revealed at the latest project meeting. Westfield benefited from the general upturn in prices fetched for store animals this year, but the net yield from the 300-strong herd of Salers and Simmentals was particularly impressive. Output per cow rose from £422 to £617. 

Changes introduced in the feed regime accounted for a jump in the variable costs per beast from £108 to £161, but with fixed costs in the enterprise falling over £50 per head to £310, that produced a net profit margin of £59.13, compared to a net loss of £108.50 the previous year. The bottom-line totals are all before subsidy. 

Compared to the QMS average for equivalent farms, its net margins put it in the top third. In a random sample taken of four other cattle operations in Caithness, it was ranked second of the five. 

The performance of the 450-ewe North Country Cheviot flock run by Mr MacKenzie also moved in the right direction, although in a slightly less marked way. The output per ewe increased from £70 to £84, with the net profit rising from £17 to £28. That left it well above the QMS average and second out of five of a sample of Caithness flocks. 

Thurso-based SAC facilitator Willie Budge said the results are encouraging. He believed a major factor in the improved cattle returns had been the decision to alter the feed regime of their stots and heifers over the winter so they were in optimum condition and weight for the sales in April. 

Previously, Westfield had kept on underweight calves and summered them on the holding before selling them at the back end. 

Mr Budge said: “Getting them all ready for the sale in April has definitely helped the profitability of the operation. 

“Maybe you should not read too much into the figures but I think they are a good indicator.” 

Mr MacKenzie is in no doubt that being part of the monitor programme has paid dividends. He said: “It’s made us far more aware of the cost of inputs and trying all the time to be more efficient. 

“It’s definitely made a difference to how we go about the business.” 

He said the changes in the feed regime to enable him to be ready to sell all his calves in April had been the major difference. But he said: “Before this we did what we did as we had always done it this way. 

“Now we’re having a fresh look at everything we do and think about whether we can do it better.”


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