27 February 1998

Accountants review to put figures into focus

Following a meeting with the

bank the structures of both

the farming and contracting

businesses are under review.

Robert Davies reports

THE FARM is looking greener than any February the Daltons can remember, but the partners are spending a lot of time inside preparing figures and attending meetings.

Talks with their bank manager and accountant revealed problems resulting from the hurried way the two businesses were split 18 months ago.

Some financial aspects were not sufficiently clearly defined. Margaret and John are partners in both businesses, and the farm partly underwrote the company created to run the Welsh Water sewage sludge injection contract. That resulted in too much overlap which was not picked up.

"The bank is concerned that on paper the farm is carrying far too much machinery that is depreciating in value more than the repayments from the contracting side," says John Dalton.

"This means that the farm is losing much more money than it should, even during the present crisis. Also the sludge business is less profitable than we thought. We have now agreed that our accountant should come up with proposals to clear up grey areas in the arrangement."

That could mean borrowing to pay the residual value of the machines into the farm account, something John Dalton is very reluctant to do. "But we have agreed to look at the options and take the advice of our accountant."

Any other type of payment into the farm would be very welcome after a long period when all cash flow has been negative. In the last month the only income has been £9 for two barren ewes sold after scanning. The same sheep would have made closer to £40 a year ago.

"This is always the leanest time of the year when we have nothing to sell and no support payment cheques are due," acknowledges Mrs Dalton. "Outgoings have included our self-assessment tax bills, and paying £7500 to the contractor who resurfaced the farm drive in the early autumn.

"To meet a Farm Capital Grants Scheme deadline we also had to find £3500 to complete roof repairs and some fencing, though we will get a 25% grant."

The first lambs have arrived early. A ewe that should have been culled after a severe udder infection, but which managed to get to the ram, dropped twins.

Two-hundred and eighty ewes carrying twins and triplets are now housed and being fed on silage plus an 18% protein home-mixed concentrate. They all look exceptionally fit, and Mrs Dalton believes they are much more settled bedded down on chopped straw, which is being used for the first time.

Ewes carrying single lambs are still out. So too are most of the 100 ewe lambs. Scanning revealed that 91 of these are in lamb, including 17 with twins. The first time mothers are due to lamb from Apr 2 and are only just being introduced to silage.

There is a lot of grass for all the sheep that are still out, which means that the ewes are taking less silage than normal for February. That is despite some better-than-average quality silage being offered. The first cut material has 28.1% dry matter, a D value of 69, 13.9% crude protein and 11.1ME.

As a precaution against a return to very wet weather, the first application of spring nitrogen is still being delayed. John Dalton does not want to risk the costly quick-release nitrogen component of the compound being leached.

Some of the gloom of the last month has been countered by the safe arrival of the new Charolais stock bull from Scotland. The 18-month-old bull cost £2500, considerably more than any previous sire. He has settled well and has an excellent temperament, and a keen interest in his job. &#42

John Dalton cleans a mobile pump which has moved slurry for nearly 20 years. It will be reconditioned and converted into a fixed pump for the above-ground slurry store. Right: Margaret Dalton shows off the first lambs which have arrived in a season extending until mid-April.

FARM FACTS

&#8226 A 125ha (310-acre) less favoured area beef and sheep unit in mid-Wales farmed by Margaret Dalton and her son John, who also operates contracting services.

&#8226 Managed in association with an ADAS full-farm advisory package.

&#8226 Quota for 435 ewes. Scotch Mules are put to Rouge tups and the female progeny used to produce Texel sired prime lambs.

&#8226 Quota for 85 sucklers, Hereford x Friesians, Welsh Blacks and Longhorn x Welsh Blacks, used to breed Charolais cross stores.

&#8226 Small poultry enterprise.

&#8226 One full-time stockman, and variable number of full and part-time contracting staff.