The Arable Group’s (TAG) 2005 biannual conference on Wednesday (February 9) at the Scotch Corner Hotel, dedicated to questioning the implications of the Mid Term Review changes for arable farmers, was attended by 170 delegates.
TAG conference 2005
 |
Despite the arable industry facing challenging times, real economies can be made, especially in the area of fixed costs, TAG’s machinery consultant John Bailey told the conference.
Mr Bailey said that while arable farmers had little control over the prices they received compared to most other industries, they had to do their utmost to reduce costs and produce as efficiently as possible within each farm enterprise.
He said it was useful to compare the farm with standard data such as Cambridge Costings which take into account machinery, labour and farmers’ labour costs which accounts for two thirds of fixed costs for arable and mixed cropping enterprises.
“Labour is a very difficult area but we must not shrink from both discussing and acting on it accordingly,” said Mr Bailey.
“If the labour bill is too high it really is a very uphill path in the medium to long term. On an area basis for mainly cereals farms the range found in practice is from 200ha per employee – sometimes considerably less – to 450ha per employee. Perhaps 300ha is a reasonable compromise.”
These figures should include a proportion of the owner or farm manager’s time and while labour flexibility was an undoubted benefit for family farms, they must accurately measure their own inputs against returns.
On machinery costs there were opportunities on most farms to make considerable savings.
“Within an overall cost of £250 her ha (£100 per acre) for growing and harvesting cereal crops, it is a question of examining every component,” said Mr Bailey.
Major cost areas to consider were:
- The number and size of tractors. Collectively the most expensive item, there should be no more tractors than people to drive them. They should be of the right size and suitability. In some cases hiring extra tractors makes sound economic sense.
- Over-insurance on combines most of which rarely do over 300 hours a year. Operating costs vary from £38 to £75 per ha (£15 to £30 an acre). A well used brand new large combine is capable of working at about £44 per ha (£18 per acre.
- Reducing the cost and times of establishing cereals. The cost of £100 per ha plus 100 minutes per ha for a plough system cannot be afforded. Accepting more minimal, non-ploughing techniques on at least a proportion of the acreage is a must.
- The long-term farm need of each machine with potential seasonal output. A higher output, wider second hand machine may fit in better with the work load and labour.
“The difference in the cost of operating on an acreage basis may be very little – over 1,000s of acres a self propelled sprayer may be only 40p per ha more than a trailed sprayer. But when it comes to priorities for the money, a self propelled machine may cost £65-£75,000 new compared to £30-£35,000 for a trailed sprayer,” said Mr Bailey.
“It would be quite possible to buy second-hand, bringing the operating cost down to less than a new trailed sprayer.”
Areas to make life easier could be in the use of larger main tractors to speed up work rates; going for one combine; using larger trailers making fewer journeys; attention to grain storage such as new flooring; being ready to use calmer days in the second spring peak of work for spraying and fertilising.
