Thursday, August 22, 2019

Taking the risk out of growing cereals

November 1, 2018 by  
Filed under Profiles

Hard work and attention to detail means efficient grain production at Heathcote Farms, Bedfordshire.

A strategic approach to risk management is paying dividends for Heathcote Farms in Bedfordshire. The business is well-placed to thrive after Brexit – and is already profitable even before the direct payments which will be phased out after the UK  leaves the European Union.

Farms manager Andrew Robinson oversees two arable units nine miles apart – the largest of which comprises 930ha of heavy Hanslope clay at Toddington, 10 miles north-west of Luton. It is farmed on a six-year rotation of wheat, rape, wheat, rape, wheat and spring beans.

The second block of land encompasses some 220ha of lighter soil nine miles away at Lidlington, itself 10 miles south-west of Bedford. It is farmed on a three-year rotation of winter wheat, winter barley and oilseed rape.

“We are moving away from 100% milling wheat to spread our risk,” explains Mr Robinson. “We have started growing more soft wheat varieties although we will continue to grow quality wheats too because that is where the premiums are and the markets are local.”

Mr Robinson says the business has always been run as efficiently as possible. He is constantly reviewing business performance, tweaking it where necessary to optimise returns and take advantage of any opportunities. And it is paying off.

“My job is to grow the business,” he explains. “I really believe that wherever there is a threat, there is an opportunity. We have positioned the business to take advantage of that – and we are ready to take any opportunties when Brexit comes.”

As milling wheat specialists, Mr Robinson says the business hits specification 96-98% of the time. But sometimes the premiums do not justify the risk involved in growing the crop, he adds, although there is little advantage in growing feed wheat over milling.

“We grow some milling wheat to Warburtons and they are genuinely supportive of British growers. They want British provenance whereas some other millers don’t seem to mind so much where it comes from – hence we are growing some soft wheats.”

The five-year average yield for milling wheat is 11.29t/ha.

“We tend to be relatively high-input high-output. For me, it is all about cost per tonne. Last year, our average cost of production was £89.11/t – although more this year because our yields were 15% down.”

Farm labour

Full-time staff are Matt Fuller and Sam Edmonds – “very switched on and excellent guys. They are a big part of what we do. We meet every Monday morning to discuss the week ahead. Three heads are better than one – they are very much involved.”

Often, the simplest ideas deliver benefits. “Sam came in one day and suggested drilling one of our fields in a different direction. I’ve been here 14 years and hadn’t thought of it – it saved us four tramlines and made it so much more efficient.”

Looking ahead to the phase-out of direct support, the goal is to remain profitable – as the farm is now – without the basic payment. “Resilience is very important – we have built the business up to be in that position and we want to continue to be able to do that.”

The biggest challenge is labour, says Mr Robinson. “We take on four students each summer and finding good students is getting harder. We had two Irish lads and they were excellent but it took one of them four weeks and a Home Office interview to get a national insurance number.”

Machinery policy

To reduce depreciation, machinery purchases are being delayed slightly – moving from a three-year replacement policy for the combine harvester and a five-year replacement policy for the Quadtrac to five years and seven to nine years respectively.

“One of the biggest killers in any business is depreciation. For us, it was getting too high. We use AHDB benchmarking and it became eveident three years ago, we changed policy. Now we make sure any new machine can do something better or more than the one it replaces.”

This can be as simple as being more reliable or efficient. The farm’s RB35 Bateman sprayer has been super-reliable. But an impending  new one with Capstan system enables the operator to change droplet size to improve application accuracy, increasing produvity.

“For us, it is the most important piece of kit on the farm and justifies the investmen,” says Mr Robinson. “We have a five-year replacement policy for the sprayer and I don’t see that changing – purely because of the importance.

“The last Bateman cost us £59,000 over five years, so they are good value. Cost of ownership and replacement is becoming a more importan factor. What considering manufacturers, we now look for longer warranties – so we know fixed costs when we purchase.

Crop establishment

Like most farms, Mr Robinson says his business will be affected by the forthcoming neonicotinoid ban, which is being extended to cereal crops from 19 December. Drilling much later is not an option on heavy soil when October is the wettest time of year, he says.

“We always have had Deter – we generally go in pre-em on the wheat and then with a peri or post-em. But when you get a warm October or early November, it will mean having to go in with another insecticide – it is disappointing to say the least and not science based.”

Blackgrass is at a rogueable level – but has taken a long time to get to that stage. It has been achieved through a mix of better quality seedbeds – lately using a 6m Watkins Quad-Till – and maximising the use of flufenacet-based pre-ems.

“We have two rows of discs and nine subsoiler legs. It is bespoke and we then put another row of discs in with a levelling board or a DD packer or a Sumo packer depending whether it is wet or dry – so it is perfect.”

Having a third set of slightly smaller discs which rotate quicker gives a finer finish. Sewage sludge is applied rotationally as well as using the farm’s own compost from its green waste business to improve soil structure. Organic matter is increasing and currently stands at around 7.5%.

Ploughing is rotational – once every six years in front of beans. Straw used to be chopped but these days is always baled as part of the farm’s strategy to combat cabbage stem flea beetle. As a result, non of the 360ha of oilseed rape has been lost to flea beetle this autumn.

Grain marketing

“All the time we are managing risk. Whatever we do, it is about risk management. We don’t have all the answers by a long way. But for me, whatever problem is out there I believe there is a solution – it is up to us to find it. You can always learn something from somebody else.”

Flexibility and adaptability is absolutely key, believes Mr Robinson.

All wheat is stored on site. In terms of marketing, about 25% is sold forward. Mr Robinson is a member of the CMG marketing group, using pools and meeting regularly with analysts and a committee group to decide how much to sell and when.

“For me, it gives me a good average – a benchmark to work from. I know I need to be above that to get a good price and I use that strategy to market my other grain – using websites and information from around the world to help inform our decisions.”

As a cereal grower, Mr Robinson says he is less concerned about Brexit than if he was a livestock farmer. “As an arable farm, I think we are in a slightly better situation. There will be issues but longer term I hope we will be better off.

“My view is that the country has made the decision and we should get on and deal with it the best we can. I am 99.9% sure that a deal will be done – it might be at the eleventh hour but it is nobody’s interest not to do it.”