Wheat farmers told to cut their costs

By FWi staff

UK farmers cannot afford to spend more than £80 to grow a tonne of wheat, according to chartered accountants Deloitte & Touche and the Royal Agricultural Society for England.

The two organisations mounted a demonstration entitled Cost of a Tonne at this weeks Cereals 98 event. The aim of the project is to get farmers to look critically at every aspect of their crop production.

A recent RASE survey reveals that 81% of arable farmers view controlling their unit cost of production as the most important influence on their profitability.

The notional £80 target will prove difficult for most farmers, according to Deloitte & Touche. The firm publishes an annual summary of its clients accounts which show that the average wheat grower spent almost £90 a tonne on their crops across the 1995-97 harvests. Only the top 25% of its clients managed to grow wheat for £78 a tonne.

“Our aim is to challenge growers to look carefully at their systems,” said Alan Spedding, RASE communications manager.

“There are two ways forward,” said Simon Bennett of Deloitte & Touche. “Either you spread costs by raising yields, or you look to reduce your costs.”

Raising yield by just one tonne a hectare will reduce cost of producing a tonne by £10. New technology, better use of inputs and professional advice will help here, he said.

“If you look at wheat growers in our annual survey, there is little difference in the variable costs spent on each hectare of land by the best and the worst. The big difference is that the top 25% spend their money with greater care. They pay attention to choosing the right varieties, using chemicals when they are needed and applying them for best effect.”

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