A new report, released by Quality Meat Scotland (QMS), AHDB and Hybu Cig Cymru – Meat Promotion Wales (HCC) has revealed eight key factors that are the hallmarks of high performing farm businesses.
The report - “The characteristics of high performing beef and sheep farms in Great Britain”- presents new analysis of the Farm Business Survey (FBS), breaking down the variations between the best performing farms and other farm businesses.
AHDB Strategic Insight Manager Sarah Baker, said: “When we modelled potential Brexit scenarios, we found that the top 25 per cent of farmers could turn a profit no matter what policy decisions are made.
“This raised many questions, the most fundamental of which was what are the top-performing farms doing differently?
“This research decisively answers that questions and more, empirically and statistically demonstrating the links between certain practices and high performance.”
Based on all the available evidence, the project concluded that eight key factors differentiate the top-performing farms. They are:
· Minimise overhead costs
· Have a clear business strategy
· Set goals and budgets
· Compare yourself and gather information
· Know what the market is and deliver for it
· Focus on detail
· Have a mindset for change and innovation
· Remain disciplined and stick to your strategy
“During this period of considerable uncertainty that Brexit has triggered, this report highlights how important it is for farmers to have a clear vison for their businesses,” said Stuart Ashworth, Director of Economics Services with Quality Meat Scotland (QMS).
He added: “It also highlights the importance of farmers’ adopting the mindset and commitment to continually focus on details within their control as well as looking for and adopting the science and innovation that drives marginal gains to deliver a top 25% performance.”
HCC’s Industry Development and Relations Manager, John Richards, explained: “It is becoming clear that farmers across Great Britain could face a challenging period ahead. However, this report has highlighted areas where improvements could be achieved.
“This, in conjunction with a supportive agricultural policy and trade environment, should sustain a prosperous and productive red meat industry.”
The report, written by Anderson’s, focuses on LFA grazing livestock farms in Scotland, England and Wales mapping out key areas such as farm size, fixed and variable costs and outputs.
It found that the difference in farm business income between the top performing 25% of farms and the lowest performing 25% of farms is about £40,000 per year in Wales, £50,000 per year in England and £60,000 in Scotland.
The analysis also revealed that the top performers have higher costs than the bottom quartile, however that additional spend is worthwhile as they produce considerably more than the bottom performers.
For example, in Wales while the top performers’ costs were a third higher they produce more than double the output of their lower performing peers.
This work was financed from the £2 million fund of AHDB red meat levies ring-fenced for collaborative projects which is managed by the three GB meat levy bodies – AHDB, HCC and Quality Meat Scotland (QMS).
The fund is an interim arrangement while a long-term solution is sought on the issue of levies being collected at point of slaughter in England, for animals which have been reared in Scotland or Wales.
The characteristics of high performing beef and sheep farms in Great Britain report can be viewed here