Bedfordia Farms sets an enviable cost benchmark
With wheat at £70/t, more
growers are focusing on cost
a tonne of production. Some
are finding there is little or no
margin left when everything
is taken into account. Not
so at Bedfordia Farms, as
Andrew Swallow reports
AVERAGE cost of wheat production after area aid was £45/ at Bedfordia Farms last harvest.
That figure, which includes rent and fixed costs, is a benchmark many would like to achieve. Meticulous management of all aspects of the business is the key, though higher yields last harvest helped, says arable manager, Bob Green.
"Yields were a good 0.5t/ha up, probably in no small part due to using strobilurins across the whole crop. But this years yields are what we expect will be the average from now on."
With 1860ha (4,600 acres) of arable crops, and pig and dairy enterprises on the north Beds unit, economies of scale keep fixed costs well below industry standards (see table). "Labour cost is reduced by in-house contracting to the livestock businesses. It fits quite well with the arable." Five men plus Mr Green are employed by the arable unit.
A balanced, six-course rotation spreads labour requirements too, and limits machinery costs. "It means there are less peaks and troughs in the workload. For example, if we did not grow barley and peas, but had all wheat and rape instead, we would need another combine. That would add another £10/ha in depreciation."
A rent equivalent of £220/ha (£89/acre) is included in all Mr Greens management accounts. At that level he would be happy to take on more land, either rented or contract farmed. Buying is less favoured.
Strong mostly Hanslope series soil underpins yield. "Our land is reasonable grade 2 ground. But it takes a fair bit of work and the right weather to produce good crops."
Variable costs are closely monitored, with many inputs supplied on a trust pricing basis from merchants and some reciprocal trading arrangements. "We work hard at building partnerships with the trade and to buy chemicals and fertiliser cheaply," says Mr Green.
Seed is mostly home-saved and drilled untreated unless testing reveals infection. "Everything is NIAB tested."
Having Bedfordias grain storage, cleaning and laboratory facilities on site helps make the most of marketing opportunities. Cereals are sold on specification and targeted at quality homes.
But grain handling is the one fixed cost not included in the figures, stresses Mr Green. "Commercial storage arrangements mean the net cost of storage to our arable business is negligible. But for many growers you would have to add £10/t here."
That leaves little margin at current prices, and highlights how important area payments are to arable profitability. "Without them farming would not be much fun," Mr Green concludes. *
Befordia Farms costs
Variety Yield V.Cs Total Cost Break even
(t/ha) (£/ha) (£/t) after AAPs*(£/t)
Abbot 10.61 172 66 43
Consort** 9.84 222 75 50
Malacca 11.25 221 67 45
Rialto** 9.09 208 80 53
Riband 10.87 195 66 43
Spark 10.50 174 67 43
Angela 9.03 147 73 46
Regina 8.15 141 81 51
Optic 6.99 108 89 54
OSR 3.65 112 173 113
Espace (peas) 5.82 151 116 54
Scirocco (sp.beans) 5.41 160 126 59
*Oilseed rape payment reduced by 50%.
**Consort and Rialto as second wheats.
Fixed costs £301/ha (£122/acre) average across rotation.
Rent Equivalent charged £220/ha. (£89/acre).
• Rotation reduces fixed costs.
• Close relationship with suppliers.
• Harvest 99 yields now norm.
• Expand through rent or contract.