Study shows IFM is key to profitability
INTEGRATED farm management has proved to be more profitable for the third year running despite a continued downturn in produce prices, according to a study of two farms.
The work on an arable farm and a mixed dairy/arable unit was carried out by Linking Environment and Farming in collaboration with Andersons and Lloyds TSB.
On the all-arable farm over three years, IFM is shown to be 20% more profitable than the conventional system. Respective feed wheat margins show output for this season was slightly higher for the latter at £943/ha (£381/acre) including area aid, as it included straw sales worth £37/ha (£15/acre).
However, variable cost savings, especially seed and fertiliser, were 50% and 14% cheaper under IFM. That outweighed the shortfall, leaving this system with a gross margin of £702/ha (£284/acre), compared with £687/ha (£278/acre) under conventional management.
Dairy/arable results reflected the increased yields of IFM at lower cost, which offset slightly higher overheads. The approach proved to be almost 40% more profitable this year, with profits hitting £141/ha (£57/acre) compared with £104/ha (£42/acre) under conventional management.
In both IFM and conventional systems, profit fell, by 40% and 50% respectively. Output fell 6%, mainly due to lower milk prices.
The main difference between the two systems was the difference in forage and concentrate costs. While IFM increases yield from forage and encourages milk production in dry summers by using kale, the conventional system relies on increased concentrate use.
As a result, forage costs/litre were slightly higher for IFM at 1.08p, but concentrate cost was 26% lower at 2.65p/litre. *