Harmonious duo forge ahead in grimmest times
IF the secret of a good business is to pool the skills of its founders in a harmonious way, then TopEnd Farming stands a very good chance of flourishing in the chilly economic climate of modern agriculture.
The business was the brainchild of Leics farmers, Neil Gilby and John Stanley. Mr Gilby is a partner in a 145ha (360 acre) family arable farm near Loughborough but cut his commercial teeth working for Velcourt for several years. Mr Stanley, meanwhile, runs 570ha (1400 acres) of arable and grassland at Grace Dieu and has a 140-head dairy herd yielding 11,000 litres/cow.
Back in 1996, even though wheat and milk prices were still good, the two began to see that the writing was on the wall for agriculture as a lucrative industry. What worried them most was the high machinery and labour cost-base of most farm businesses, a financial Achilles heel that would soon be found out once prices started to plummet. Action, they decided, was needed.
It took until 1998 to sort out what form this action should take, but then they moved fast. They formed a limited company – TopEnd Farming – to contract farm Mr Gilbys 145ha (360 acre) family farm, Mr Stanleys 240ha (600 acre) of arable land plus another 80ha (200 acre) already share-farmed.
At first they used Mr Stanleys existing combine and big tractor, but supplemented them with a new 120hp Deutz and 20m trailed sprayer and were more than happy to use local contractors to help them out. They were, and remain, passionate about keeping machinery costs under control.
"One of our main driving forces is keeping machinery costs down," says Mr Stanley. "What kit we have, has to be good, reliable and up-to-date. But we havent gone mad with the cheque book; we kit up according to the workload."
In spring 1999 they tendered for the contract to farm Brooksby Meltons 220ha (550 acres) but werent sure whether theyd get it in the face of competition from big-name farming companies.
"As a new company we didnt have the track record of some people and our machinery was a bit overstretched," admits Mr Gilby. "We had to bite the bullet and re-equip completely across the board."
But, in the event, their enthusiasm, professionalism and keenness to get involved on the educational side won the day and they added the colleges arable land to make a grand total of 685ha (1690 acres) being contract farmed. That was boosted in early 2000 when TopEnd took on another 100ha (250 acres) for a local farmer and then 690ha (1700 acres) near Stamford 50 miles away.
With total acreage nearing the 3600-acre mark and spread over a 50-mile radius, further investment in new machinery was inevitable. The equipment tally now stands at one 250hp New Holland, two 165hp New Hollands (all scheduled to do 1500 hours a year), one 120hp Deutz, one Claas Lexion 460 and one 6m Vaderstad drill. They also took on the existing Claas combine at Stamford.
Staff numbers have risen, but only slightly. Mr Gilby and assistant manager Steve Walker deal with the day-to-day organisation across the six farms and two further full-timers, Neal Halliday and Richard Harris, do the tractor driving. Thats not quite the one-man-per-1000-acres figure beloved of agricultural accountancy theorists but its not far off.
And both Mr Gilby and Mr Stanley are well aware that keeping machinery and labour costs on a tight leash is what gives them the economic advantage over the vast majority of farm businesses. Their fixed costs are well below the £100/acre threshold, the point those same economists say you have to get below to even think of a profit these days.
This is greatly helped by the fact that Mr Gilby is a BASIS-trained agronomist, so theres no need to buy in expensive advice.
"We have no upper management, no agronomists, no consultants and no agents," says Mr Stanley. "Everyone here sits on a tractor and farmers know there are only the two of us to speak to."
Having proved that they can offer a good return to the farmers they work for – and make a profit – in two of the worst years ever in farming, theyre confident they can thrive in the future. New land to farm is being sought; given the continuing difficulty for farmers to make a worthwhile profit, it will no doubt be found.