2 March 2001

EASTONLODGERECIPEFORSURVIVINGCRISIS

Surviving the farming crisis is the focus for every farm business. To find out how

farmers weeklys own farm is faring at Easton Lodge, near Stamford, Lincs.

Charles Abel spent a morning with manager John Lambkin discussing the key issues

&#8226 How would you summarise the state of the Easton Lodge arable business today?

"For the past three wet years yields have held up, averaging 9.7t/ha for winter wheat compared with 7.5t/ha during the drier years before that.

"The net effect is that poor prices have not hit us as hard as they could have done. But profit as a sole trader on 242ha of arable cropping was down from £21,000 in 1999 to an estimated, but as yet unaudited, £10,000 for the financial year just ended, after all costs including rent. Bearing in mind that salary and re-investment still have to come out of that it is not sustainable, so improvements in the performance of the Easton Lodge pig unit were welcome."

&#8226 What are the prospects for the year ahead?

"Accounts for the 2001 year end, which will include sales from last years harvest, should show an improvement. It is tough to call, but I think we could be back up to £20,000.

"I think grain prices will rise, especially for milling wheat, as the effects of the reduced drilling and poor crops feed through. Provided we can keep costs under control and get a good harvest, we might have seen the worst of it.

"But with such low arable profits it is difficult to be positive. £20,000 profit before salary and reinvestment is not enough. Even 10t/ha of wheat at £80/t does not look special."

&#8226 How has the wet winter affected cropping at Easton Lodge?

"Wet weather has not been the problem for us on brash land that it has been for many growers. Drilling was hit, but we managed to get all the main work done by Oct 15 and the first beet field drilled to Malacca on Jan 15 – and it is all sprayed.

"The big concern now is if we get a dry spring. Drought is still the biggest risk on this farm, despite big changes to our agronomy since the last really dry year in 1995.

"We now drill earlier and use quality varieties to get a premium. We also grow thinner canopies which require less moisture and have new chemistry, such as strobilurins, which help. But given the lack of rooting in crops this year we will be looking to go on with an early pgr to stimulate root growth and may look at N in late February."

&#8226 What is the main change you are making to improve profitability?

"The biggest change has been cropping. Linseed has gone. It was nice while it lasted, but once the seed premium went it no longer stacked up.

"Perennial ryegrass has gone too. The EU seed glut meant prices had been too low for too long. And since we moved to a more welfare friendly approach in the pig unit, with more straw, we no longer need the ryegrass fields for disposing of slurry in the winter.

"Cropping is now much simpler, with half the area down to winter wheat mainly for milling, followed by Pearl winter malting barley as an entry for rape, vining peas for seed, set-aside and sugar beet.

"Given our variable yields premiums are vital, the vining peas attracting £80/t, for example. It is something we can do because we have the skills and the clean land, so we need to play to that strength.

"Beet area is also being cut a further 10%. There is no point growing C-beet. At one stage we had 1000t of C beet on an 880t A and B quota, which makes no sense at present prices."

&#8226 What is the potential for

reducing labour costs?

"We will be using two fewer harvest students this year. Traditionally we have had a massive labour peak for 6-8 weeks when David Cham, myself and three students are busy harvesting, baling and handling 350t of small straw bales, carting 2500t of muck, spreading slurry and getting ready for drilling on Aug 24.

"Moving to a contractor for big square bales, which the pig unit can now handle, dramatically reduced harvest labour last year. Combined with less slurry to shift that should mean we now only need one additional student at harvest."

&#8226 Is there any scope for cutting machinery overheads?

"Seven years ago we re-tooled, buying quality machines in the hope that the initial high depreciation would be offset by lower repairs.

"The frustration is that repairs have been much higher than budgeted, despite only moderate hours. In 1999 the two frontline Fendts cost £8000 in repairs.

"We still have three years to decide what to do and crop prices might rise, but if not we will have to either have to keep machines as long as we can and then buy second-hand or do what other farmers have been doing and buy a cheaper machine and keep it for just the three years it is covered under warranty."

&#8226 Have you considered farming more acres to spread fixed costs?

"We have looked at extra land and done the calculations and tendered, but so far we have been unsuccessful, even at ridiculous rents.

"We keep looking – 400ha would be an ideal farm size for us. Even an extra 100ha would be nice. But we can only do it at realistic prices."

&#8226 Could contractors play a bigger role at Easton Lodge?

"I am reluctant because so much of what we do is so time sensitive. Timing really is everything if you are growing quality and seed crops on droughty, marginal land. I think we already use as much contracting as we can for the beet harvesting, muck spreading and straw baling. To use a contractor for the essentials, like drilling, spraying, spreading and harvesting is just putting too much at risk."

&#8226 What can be done to cut other overheads?

"Secretarial support is down from four days/week to seven hours, property repairs are on a needs-only basis and the only advice we take is agronomy through A1 Farmers, which provides a field-walking service plus five full days of training for under £13/ha."

&#8226 Turning to the crops, which looks most promising so far?

"Wheats look the best. They are always the top gross margin combinable crop, turning in £855/ha last year. Despite the exceptionally wet weather they have got away well on our brashy land. Abbott after set-aside drilled on Aug 24 is a little thick, despite going in at 115 seeds/sq m (64kg/ha); it could have been 25% less.

"Most of the rest, drilled in snatches from Sept 16 to Oct 15, looks well and had a Cheetah/ ipu/trifluralin herbicide mix for less than £10/ha. That may need following up in spring, but has got things off to a good start."

&#8226 What are the prospects for cost savings on ag-chem inputs?

"Last year we spent £18,000, which was well down on the year before, partly due to the season, but also due to keener pricing.

"There is no doubt that group buying gives us an advantage. I now expect prices to go even lower as manufacturers look more closely at direct supply, cutting out distributors.

"I think manufacturers are really waking up to the fact that farmers have computers and could order direct on the internet."

&#8226 What are your plans for

marketing crops this year?

"So far I have sold nothing for harvest 2001. I want to wait and see. People said £68/t forward was good when wheat was £58/t, but I think sad-looking wheats and undrilled fields mean it is worth waiting." &#42