More land not the only way ahead

23 February 2001

More land not the only way ahead

Farming more land is a

popular way of reducing

fixed costs. But careful

planning is vital.

Louise Impey visits a Herts

farmer with a particularly

clear expansion policy

LAST years commodity price crash did not stop Herts grower Ian Pigott expanding his arable area by 25%.

But out of six or more farms available in the area, only one fitted his strict criteria. "It had to be neighbouring land and capable of being added to our existing area without the need for extra labour," he says. "We cant justify taking on another man."

The temptation to tender for the other units was strong. "But it had to make financial sense. As well as the rental cost or management charge, there are practical issues such as moving equipment from farm to farm, which can take up to half a day in such a built-up area."

Time and money spent on a business growth and development course at Cranfield Institute of Management had convinced Mr Pigott of the need to expand.

"The plan was to grow the business over the next 2-3 years, to spread our fixed costs and make better use of existing machinery. But the collapse of grain prices forced us to look very hard at this strategy.

"We realised it would not increase our net profit for the time being, but it would put the business on a firmer footing."

Two alternative enterprises already established at Thrales End Farm, Harpenden, helped fund the expansion. "We converted the old pig buildings into light industrial units and offices some time ago, to take advantage of our location, and set up a livery yard. The viability of both means our expansion has not been funded solely by arable activities."

The decision to replace the drill and a tractor in 1999 were also contributing factors. "Previously we were drilling 1200 acres with a 4m drill, which was a lot to ask. We replaced it with a 6.6m combination drill, so we had some spare capacity.

"But it also took out one cultivation, which meant it paid for itself in one year. And it reduced our labour requirement."

Bringing the neighbouring 178ha (440 acres) into the fold means he now farms 688ha (1700 acres) of combinable crops. All the cereal land is ploughed, so an additional tractor is hired in the autumn.

"Hiring a 165hp tractor costs us £575 a week, but it means we do not overburden the balance sheet."

Two more factors helped convince Mr Pigott to expand the arable activities. "My father is still involved with the farm, and his expertise and help is priceless. Having someone else is invaluable – it is very difficult to run a farm from a tractor seat.

"In addition, I have a good working relationship with the farmer with which I have formed the management agreement. We have a mutual understanding and I enjoy working for him."

Mr Pigotts figures show cereal overheads of £180/ha from stubble to stubble. "The only way to bring this down any further is to cut our establishment costs. But we are not convinced about lo-till, as we have very varied and stony soil types and grassweed concerns with the increasing costs of effective control."

He believes economic conditions make it important to be selective about taking on extra land. "I admit the figures used for the management charge on our extra land are more aggressive than you would find in a Nix pocketbook. But it fitted our long-term strategy.

"If we had the chance to add another 400 acres tomorrow, the costings would be far tighter. We would not be able to do it without another man, so the economics would be different." &#42

Extra acres only make sense if costings have been gone through first and stack up well, says Herts grower Ian Pigott.


&#8226 Consider labour effect.

&#8226 Link with drill/tractor change.

&#8226 Neighbouring land best.

&#8226 Different soil types help.

&#8226 £180/ha cereal overheads.

Drilling progress

By the end of December Ian Pigott had drilled 90% of his 688ha. "The extra land we took on this year is lighter than ours, so we were able to get on and drill when conditions prevented us doing anything else." Weed control has not fared so well. "We set out with the best intentions, and I had contractors ready to apply Avadex. Now we will have to wait and see how field conditions develop before deciding the best course of action."

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