27 July 2001

How trio merged everything

but the kitchen sink…

More and more farms are

reaping the benefits of joint

venture farming. But some

go further than others, as

Amanda Dunn found out

when she visited a farming

business that has merged

labour, machinery,

management, agronomy,

input buying and grain

handling, storage and

marketing

IF you want to survive in agriculture today you have to be flexible and you have to think laterally, says Northants farmer and Brixworth Farming Company director Richard Turney.

That is exactly what three Northants farmers did 12 months ago when they merged to form the Brixworth Farming Company. Today, with additional acreage they crop 1842ha (4555 acres) as one unit, operating with improved timeliness, substantial savings and considerable job satisfaction.

"I had the seeds sown in my mind 18 months ago, when I heard a joint venture farmer commenting on savings," says Charles Matts, managing director and instigator.

After a second conference and some initial consultancy Mr Matts, Mr Turney and neighbouring farmer Tom Saunders decided to go ahead with a merger between their three farms to form BFC, a joint venture limited company managing 1104ha (2730 acres).

Each farmer was made a director, with equal shares and equal voting rights. Mr Matts took on the role as managing director and Mr Saunders operations manager, both receiving remuneration for hours worked.

Mr Turney used the chance to concentrate on his dairy unit, providing extra chargeable labour to BFC as necessary. Bidwells Charles Course was employed as a non-executive director.

Loans were made from original farming partnerships to the new company to finance machinery and labour costs. "The loans were determined on a pro-rata basis, according to acreage committed, and were largely financed by machinery sold to the new company," says Mr Matts.

Labour was transferred, leading to redundancies in each case. Capital was also realised from the sale of surplus machinery.

"There was a huge duplication of kit across the three farms, and we were probably each of us overstaffed as individual units," says Mr Turney.

"Suggested savings were substantial," says Mr Matts. "We felt that if we made half that indicated we would be very pleased."

First season harvest and autumn cultivation work was carried out using existing equipment sold into BFC from the individual farms.

Substantial machinery purchases were made this year to complete the agreed machinery profile for the larger cropped area.

All three farmers were keen to benefit from cost cuts as quickly as possible so the merger proceded pre-harvest 2000. But harvest planning posed an immediate logistical problem.

"Everything pointed towards running the two existing TX68 combines together. By definition we would be doubling the output we were used to," says Mr Matts. "But we recognised that none of our systems could handle over 400t of grain a day and we looked around for a solution."

Local commercial store and marketing specialist Charles Jackson offered to supply an articulated lorry shuttle service.

The two combines worked together filling a 15t chaser bin which in turn fed the artics, effectively eliminating the need for an aggregate of four students and three tractors normally hired in for the summer.

Drying costs were met by the company and shared equally between the three farmers to ensure a fair package.

"That means there are no arguments about cutting one persons dry field while someone elses gets wet," says Mr Matts.

"Cropping for last harvest was not planned for the company. Consequently we found we had three sets of land ownership, with three sets of priorities and three sets of marketing contracts.

"Early on it became very apparent that if this merger was going to work we would need to keep things simple, pool cropping and ultimately working towards one rotation.

"As individuals we are all part of a company now. What works best for that company will work best for the individual," says Mr Matts.

"But once we had pooled the cropping we realised that the next stage was to pool market. That was a much bolder step. You cant market by committee, so we have written a marketing agreement giving total office to Charles Jackson this harvest. "

Two further farmers with similar cropping and systems approached BFC last year with a view to joining the company.

Hugh Lowther with 343ha (825 acres) joined as shareholder only in Jan 2001, selling off redundant machinery and deploying two full-time members of staff.

Justin Blackwood preferred to have his 404ha (1000 acres) contract farmed by the company. All machinery was sold and two full-time staff made redundant. Mr Blackwood provides an agronomy service to BFC.

"We will look at further contracting in the future, but will only take it on if it is right for the shareholders," says Mr Matts. "We want to drive costs down by operating a simple system.

"We are not empire building. Jointly, we are no bigger than we were 12 months ago. What we are doing is simply trying to survive." &#42

Merger benefits

&#8226 Richard Turney "Last autumn was a pig of a year. Previously we would not have communicated, but BFC gave us the ability to share problems and handle them between us. It was a hell of a relief."

&#8226 Tom Saunders "Merging our farms has put challenge and excitement into the job."

&#8226 Charles Matts "I knew I had to make radical changes. BFC has given us labour and machinery savings, with a fantastic work force and a team that wants to go forward."

Merger benefits

&#8226 Richard Turney: "Last autumn was a pig of a year. Previously we would not have communicated, but BFC gave us the ability to share problems and handle them between us. It was a hell of a relief."

&#8226 Tom Saunders: "Merging our farms has put challenge and excitement into the job."

&#8226 Charles Matts: "I knew I had to make radical changes. BFC has given us labour and machinery savings, with a fantastic work force and a team that wants to go forward."


CHARLES MATTS TOM SAUNDERS RICHARD TURNEY HUGH LOWTHER JUSTIN BLACKWOOD

526ha (1300 acres) 404ha (1000 acres) 242ha (600 acres) 343ha (825 acres 404ha (1000 acres)

arable/2000 sheep flock arable/120 finishing cattle arable/150 dairy cows – (formerly 1900 acres)

ww,ww,beans,ww,ww,wosr ww,wosr/oats ww,wosr/oats/maize ww,wosr,ww,s.beans ww,wosr,ww,s.beans

New Holland TX68 combine New Holland TX68 combine CONTRACT COMBINED Deutz Fahr 4075 combine CONTRACT COMBINED

New Holland 8670 Massey Ferguson 180hp Case MX135 John Deere 7810 FW60

Case 5140 Fastrac 135 – Fastrac 145 Versatile

MB Trac Ford 125hp – – JCB Fastrac

130hp tractor HIRED 10-12 weeks 120hp tractor HIRED 10-12 weeks 140hp tractor HIRED 10-12 weeks Airtech 24m sprayer

Simba Freeflow 6m culti-drill

Hardi 2000L 20m sprayer Gem 20m sprayer Hardi 1600-litre trailed sprayer Knight 2000L 20m de-mount Simba Discs

sprayer Simba Cultipress

Accord 6.6m air drill Lely 4m combi drill MF30 4m conventional drill Accord 4m combi drill Simba Double Press

Simba Mono

Dowdeswell 6 furrow plough Dowdeswell 6 furrow plough Dowdeswell 5 furrow plough Dowdeswell 5 furrow plough

Teleporter Teleporter Teleporter Teleporter Teleporter

3 full-time employees 2 full-time employees 1 full-time tractor driver 2 full-time employees 2 full-time employees

Charles Matts + +Tom Saunders + Richard Turney + Hugh Lowther + Justin Blackwood

brother/partner John Matts part-

time

BRIXWORTH FARMING CO

1438ha (3555 acres) + 404ha

(1000 acres) contract farmed

ww,wosr,ww,oats/beans

3 full-time staff

machinery profile – harvest 2001

Charles Matts Tom Saunders Richard Turney Hugh Lowther Justin Blackwood Director, shareholder Director, shareholder Director, shareholder Shareholder, BFC land contract farmed by BFC

full-time Managing Director, full-time Operations Manager, part-time support, BFC – part-time agronomist to BFC

BFC BFC


similarly varied soil types across all farms – Banbury, Hanslope, Denchworth


July 2000 January 2001 January 2001