Tuesday, August 20, 2019

8 tips to remain profitable after Brexit

March 5, 2019 by  
Filed under News & Business

Farmers seeking to remain profitable after Brexit should adopt eight key characteristics, say analysts.

The top-performing 25% of farms will all remain profitable – whatever economic scenario eventually emerges after the UK leaves the European Union, suggests a study by the Agriculture and Horticulture Development Board.

This means performance will be key in the post-Brexit world, says AHDB analyst Sarah Baker. The top 25% of farms all share eight key characteristics which ensure they outperform other livestock and arable units, she adds (see below).

“Direct payments will be diminishing, before disappearing completely – at least in England,” explains Ms Baker. “For me, it means performance on farm and our ability to get returns from the market become even more critical in our success.”

Big difference

Top performers make three or more times more money than those in the bottom quartile.This equates to an average difference of around £100,000 a year for cereals and oilseeds, dairy, pork, horticulture and potato sectors and around £50,000 a year for beef and lamb.

AHDB analysts examined the financial difference in performance between farms with similar characteristics. They took into account overheads, variable costs and agricultural output. Findings are available in a special Horizon report, complete with case studies.

Ms Baker says: “Making performance improvements doesn’t have to be about heavy capital investment – more often it is about doing a range of things well and reaping the benefit from many interdependent tweaks.”

For some farmers, the report will simply be a reminder of best practice already being undertaken on thousands of holdings across the country. But for others it gives a base from which to start addressing factors that will place them in a stronger, more independent, position.

Fit for future

“With case studies and evidence, it’s a reference point for farmers wanting to take a fresh look at their businesses to ensure it is fit for the future,” says Ms Baker. “We all make thousands of decisions – whether in the day-to-day running of a business or those more strategic in nature.

“Regardless of the policy environment, there are opportunities to strive for incremental improvements over a range of parameters to get your business and across all of the sectors as a whole in the best possible shape to take on the change.”

The Horizon report emerged from the AHDB’s well-received series of Brexit impact assessment documents, which examine the prospects for agriculture across a range of sectors. It seeks to answer a crucial question: what is it that top-performing farms do differently?

Ms Baker says the goal was to provide farmers and growers with more information to help them focus their efforts. “We hope that it does that for you and continues to provide the groundwork needed to strengthen our industry into Brexit and beyond,” she says.

The Horizon report and other resources can be downloaded from ahdb.org.uk/Brexit.

The 8 key factors

• Minimise overhead costs
• Set goals and budgets
• Compare yourself with others and gather information
• Understand the market
• Focus on detail
• Have a mindset for change and innovation
• Continually improve people management
• Specialise