Thursday, May 23, 2019

Important to optimise machinery costs, farmers urged

January 2, 2019 by  
Filed under Machinery

Farmers across the country are scrutinising their costs to optimise expenditure on machinery – and make sure they are getting value for money.

It follows a review by the Agriculture and Horticulture Development Board which suggested some UK farms were spending too much on machinery. The AHDB has also cautioned against farms who spend too little.

In the review, annual machinery and labour costs ranged from £288 to £593/ha across farms measuring from 97ha to 1,278ha in size. Machinery accounted for 25-30% of the farms’ wheat growing costs.

During the past few months, AHDB expert Harry Henderson has been encouraging groups of farmers to delve deep into their machinery strategies – and decide what to do next. It was important to spend the right amount of money, he explained.

Risk management

“It boils down to risk management,” said Mr Henderson.

“You don’t want to try to reduce your costs so much that you expose yourself to practical risks like machinery breakdowns or running out of time. On the other side, however, if too much money is tied up in machinery and replacements, it exposes farms to a different kind of risk.”

Farmers across the AHDB Monitor Farm network have discovered there is no hard and fast rule when deciding how much power to employ. It is much more complicated than deciding, say, 1.5hp per hectare or below one member of staff per 1,000ha for an all-arable farm.

Mr Henderson said: “As long as a farm business understands the cost of machines, is able to weigh up the potential benefits of contractors and to analyse timelines, then the manager can adjust the system accordingly.”

With the trend towards moving less soil gaining momentum, machinery will be doing fewer hours and so annual running costs will go down. However, costs per hour will increase, due to the costs being spread across fewer hours.

Work-life balance

“It is important to view the way costs are set out,” added Mr Henderson. “Although you could be putting just 200 hours a year on a tractor, this does not automatically point to underutilisation, for example if it only needs to pull a direct drill but does have the capacity to get the job done in ideal conditions.”

Risk management isn’t just about the finances, however. Farmers also want a good work-life balance. Buying a bigger machine which gets the job done quickly means more time to spend with family and friends, says AHDB Monitor Farmer Robert Cross.

“As a father to three children, I find that, yes, spraying and getting the timing right is very important to the actual profitability of the crop but having a work-life balance is very important and I want my children to be able to say to me: ‘you weren’t always gone missing, spraying.’

“So, having a sprayer with a little bit of extra capacity, where it’s not ridiculous in terms of costs but where I’m able to then choose the times I go out or take an hour out in the evening to spend time with my family over a meal is important to me.”

For more information, visit cereals.ahdb.org.uk/monitorfarms

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