8 steps to help beef and sheep farmers improve their business performance 

Beef and sheep farmers are being encouraged to carry out a 60-minute farm review after a study revealed top-performing farms are generating £50k more, on average, than those in the bottom 25%.

The study, commissioned by AHDB and carried out by Andersons, found top beef and sheep farms in less favourable areas (LFA) on average yielded an income of £45,200 a year compared with -£1,600 in the bottom 25% of farms.

On lowland grazing systems, the difference between top and bottom was £55,100.

The 60-minute review, from AHDB, will help farmers understand their strengths and weaknesses and compare technical and business performance with similar farms in England.

For farms wishing to focus on improving performance there are eight key areas they can focus on.

Luke Crossman, AHDB senior analyst, outlined the key focus areas during a recent webinar titled “Characteristics of top-performing farms”.

1. Minimise overhead costs

Managing costs is the biggest thing farmers have control over.

Higher outputs account for just 10-30% of higher profits in top-quartile farm businesses, but lower costs contribute 65-95%.

2. Set goals and budgets

• Get a formal business plan in place, stick to it and keep assessing it.
• Look at your business performance and specifically the breakdown of costs and outputs and see where you can improve.
• Stress test your plan. For example, factor in scenarios such as prices falling 5% and see how that would affect your business. Build in plans for how you would adapt should that scenario happen.

3. Benchmark

Benchmark with yourself to see where you are now compared with last year. And compare yourself with others using tools such as AHDB’s Farmbench.

You can also compare ideas in discussion groups with like-minded people and businesses.

See also: How beef farmer is achieving gross margin of £370 a cow

4. Understand the market

• Talk to your main customers and ask them what you could do to make your output even more desirable than others. Then do it.
• Check you have the right breed or crop varieties for your customers’ requirements and your farm system – understanding the entire supply chain will help.
• See if there is anything you can do differently to boost output.
• Look ahead at inputs – for example, how feed prices are doing.

5. Focus on detail

Looking at the fine details of every aspect of your business. Changing little bits here and there will give marginal benefits that will add up to make a difference.

Monitor changes to see what the outcome is. There isn’t a silver bullet that can solve everything. For example, is your feed yielding the performance it should?

6. Be open to change and innovation

If you are doing the same thing you have always done, it is not going to allow for development and improvement.

Look at what others in your industry are doing, and consult with those outside your industry to develop learning. The principles for business are the same in any industry not just farming.

Attend discussion groups and seek new ideas and collaborations. Listen to others.

7. Continually improve people management

Being able to retain staff and keep them happy is key.

Find out what their personal goals are by having a formal chat with them. Money is not always the key to retaining staff.

8. Specialise

Look at where the skillsets lie within your business.

• Be self-critical about where you are and where you want to go.
• Use skills effectively. If you are not the best at paperwork, for example, bring someone in who is and use your time more effectively doing something else.