Arable groundwork rethink brings control in-house

In a bid to improve resilience, save costs and better manage the arable operations, all groundwork for Harvest 2013 at the Strathmore Farming Company was brought in-house.

In recent years the farm’s use of and reliance on contractors had grown as a result of increased arable acreage and the need to concentrate the farm’s few skilled staff on crop care and harvest, says farms director David Soutar.

However, the aftermath of 2012 and an extremely difficult spring where most fields needed micromanagement for sowing work, plus the strains from the demands of the season, forced Mr Soutar to reassess the farm’s reliance on contractors and the decision was made to bring as much as possible in-house.

To aid this plan, additional skilled staff have been employed and the business has invested £90,500 in new machinery – all bought through finance agreements.

Harvest 2013 was completed on 18 September and all sowing, cultivation and baling to date has been done using existing labour and machinery.

“By doing it ourselves we can hopefully monitor and manage it better,” says Mr Soutar. “Bad seasons can be stressful for both contractors and customers as everyone wants them at the same time.”

For the past four years the business has had the capacity to do ploughing in-hand, but all baling, sowing and some ploughing was carried out by contractors.

The plan is to bring that back in-hand and work with the local machinery ring to fill any shortfall, says Mr Soutar.

Seed drilling cost savings

The use of contractors to establish the 2013 crop, excluding diesel expenses, cost £57,500 or £62.50/ha (£25.30/acre) including help with ploughing.

In order to complete the work on-farm, £59,000 was invested in a Horsch 4m Pronto combined seed and fert cultivator drill.

Over a five-year period, this equates to an annual cost of £10,860 if residual value for the drill at the end of the five-year period is £15,000.

Labour and tractor use is expected to cost £14,040/year based on an estimated 54 x 13-hour days for a man and tractor.

Annual cost of spares and maintenance, including the one-year warranty, is expected to cost about £3,500/year.

In all, bringing the sowing in-house is expected to save the business £18,500/year, based on an anticipated cost of £32,400/year, or £34.60/ha (£14/acre), excluding diesel costs.

This includes £4,000 for extra cultivations in difficult conditions where a power harrow might have fared better.

The benefits of bringing arable sowing back on-farm are more control over timings, attention to detail and no stress when contractors’ workloads are stretched, says Mr Soutar.

Ploughing work is also being brought in-house where possible, although it is difficult to project cost savings.

“Ploughing savings will depend on the year, but with extra skilled staff it is hoped that contract ploughing will be minimal,” says Mr Soutar.

The business previously also used a contractor for some of the combining, but this stopped three years ago when a second combine was purchased to bring all harvesting work in-hand.

Baling costs

Projected baling of both straw and silage bales would have cost the business £26,800/year, or £3.35/bale, including diesel costs, when using a third party – based on 7,000 x 1.85m bales of straw and 1,500 x 1.5m bales of silage.

In order to carry out baling in-house, £31,500 was invested in a Krone 210 round baler. Over a five-year period, this equates to repayments of £5,850/year or 69p/bale, based on a residual value for the baler at the end of the five-year period of £5,000.

Net wrap costs are calculated at 80p/bale using edge-to edge-wrapping. Mr Soutar considered using a cheaper wrap but opted for this because he will be producing larger bales for storage outside.

Tractor, diesel and labour costs have been calculated at 112p/bale, while projected repair and spare parts costs, including a two-year warranty, are about 30p/bale.

This results in costs of £2.91/bale, including diesel, with savings of 44p/bale or £3,750/year compared to the use of the contractor.

“The saving is not so defined as the drilling, but this move gives more flexibility to manage baling when one wants to – instantly – which is very important in a catchy season,” says Mr Soutar.

“The Krone 210 baler is robust and has twin axles which keep the baler safer in rougher areas. We can bale to 7ft but opted for slightly less as it allows best use of trailer capacity – the 7ft bale of barley straw weighed 515kg.”

Staffing changes

The staff structure at Strathmore has changed and strengthened in line with the decision to bring groundwork in-house, reduce pressure on individuals and protect the business should anything happen to the key players.

Mr Soutar, as farms director, with part-time assistance from Kathleen Smurthwaite, continues to head up the management team. However, a new role of working arable manager has been created and Alastair Cronie, an experienced manager, has been appointed to this position.

Alastair Adams, as working pig manager, already occupies a similar role in the pig enterprise and both these roles are seen as key to the team structure.

Ian Coventry continues as a team leader in the arable team and takes day-to-day responsibility for the cattle enterprise.

“Ian has 40 years valuable service with the business and provides hugely valuable knowledge and experience all round,” says Mr Soutar.

Both the arable and pig managers have a dedicated team of staff, who are responsible for and take pride in their respective enterprises, he adds.

“We are hoping that once a month we will have a management meeting in addition to weekly team meetings, but it’s really a small business and we are in touch all the time – good communication is imperative,” says Mr Soutar.

“Because of the weather, and the pig crisis, last year was probably the most difficult year in my whole working life.

“For the sake of the business, we need this new depth in management to help look after both the arable side and the pig side making us more resilient in the future.”

By bringing key operations back to the farm, Mr Soutar hopes to help retain good skilled operators who see their role in farming as a career, and who can see a future with the business.

“Our aim is to have staff on the ground who want to take ownership of the job and who see their efforts as a very important part of the business,” he says.

“While I want to empower people to take pride in their results, they must also be able to take the rough with the smooth and the past couple of years has proved the worth of having dedicated staff.”

Decent weather during the summer has helped the business “get back on an even keel”, adds Mr Soutar.

“We spent a lot of cash in the spring on drainage repairs and can hopefully look forward to a reasonable harvest next year – if we can establish 2014 crops in good order.”

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