Farm overheads (fixed costs) per acre for a non-dairy livestock and arable enterprise?

[Farmertom1988]

Hi,

We are currently milking and thinking of packing up next year and just wondering how much we can expect our overheads to fall without the dairy herd.

We are a 250 acre family farm and would look to keep some livestock, a bit of beef or some pigs alongside some arable.

By fixed costs i would include labour, contractors, machinery repairs, fuel and oil, electricity, machinery depreciation, water, property repairs, insurance, office and telephone and professional fees.

And exclude rent, finance and private drawings

 

[An Gof]

Your best source of information will probably be the Farm Business Survey Data. You can get information for your area, enterprise mix and size.
The data will be historical (18 months or more) but will all be produced to a standard methodology so differences are real.

 

[Flat 10]

Your best source of information will probably be the Farm Business Survey Data. You can get information for your area, enterprise mix and size.
The data will be historical (18 months or more) but will all be produced to a standard methodology so differences are real.

And that’s the data to make nix I think
You will surely miss the regular cheques for milk when you get to the poor relations of beef and cereals.

 

[Mixedupfarmer]

And that’s the data to make nix I think
You will surely miss the regular cheques for milk when you get to the poor relations of beef and cereals.

Don’t do it

 

[Nick Adams]

For 18/19 ours were £153.38 as calculated by the Farm Business Survey. I entered £200 - 250 in the poll.

Leaving dairying is a very different world. You'll need to cut costs to the bone to make a decent profit.

 

[Hard Graft]

well our fixed cost are about close too but under £100ac

 

[egbert]

hard to put a figure on.
You could easily manipulate the figure up or down depending on how you keep up infrastructure and machinery upkeep, and with livestock whether you let age/quality structure of herds slip up or down.
(I don't know much about arable, but presume the same must be true with soil OM etc)
I often deliberately manipulate ours depending on projected tax liability, and/or desired land acquisition etc.
IE if I think we're going to be earning too much for the tax mans liking, I might pump a bit more in, or if I've just gone and done something rash with the cash, I'll let it slide for a year or two, and trade on previous inputs.

I can and do work the average maths out, but thats only after a lifetime of doing it on the same ground.
I had quite a row with a pal backalong, when we'd both been off to listen to that twerp Clarke talking about farm profitability.
My pal had no grasp that you could disguise/lose track of entire years profit/loss simply by manipulating such matters.
He really couldn't see it, despite having farmed nearly as long as me - and thought Clarke was some kind of genius.
But there you go. (my pal had been to college mind)

 

[DaveGrohl]

I'm confused. Surely looking at your own farm accounts is the best place to start? Your costs are in there, how difficult is it to look at them and work it out for yourself?

 

[ajd132]

Remember to include any family labour at a sensible cost

 

[ollie989898]

I would be talking to your accountant and possibly other advisers before doing anything. Not just for tax advice but for what they see as wider trends across the industry.

 

[An Gof]

For 18/19 ours were £153.38 as calculated by the Farm Business Survey. I entered £200 - 250 in the poll.

Leaving dairying is a very different world. You'll need to cut costs to the bone to make a decent profit.

That’s a very low figure ..... we’ll done, can’t see how I can get anywhere near that

 

[ollie989898]

I would like to ask the question, being straight up now. If you owned 250 acres of (good) land outright, and had a heap of good facilities and no borrowings. What sort of income could be had from having beef/pigs/arable on a theoretical farm and how much work would it be? Obviously dairy is a different world because business turnover is often well out of sync with farmed area, is this the case with beef/pigs/arable? I guess what I am asking is what farm size is ultimately sustainable long-term?

 

[egbert]

That’s a very low figure ..... we’ll done, can’t see how I can get anywhere near that

I haven't entered a figure, as the raw data suggests the graph doesn't go low enough for me.
But then, the OPer is probably on rather different ground to me.

 

[An Gof]

I haven't entered a figure, as the raw data suggests the graph doesn't go low enough for me.
But then, the OPer is probably on rather different ground to me.

Acreage is your friend @egbert
Being on mains water and discovering a water leak yesterday my fixed costs took a significant turn for the worse this year.

 

[egbert]

I would like to ask the question, being straight up now. If you owned 250 acres of (good) land outright, and had a heap of good facilities and no borrowings. What sort of income could be had from having beef/pigs/arable on a theoretical farm and how much work would it be? Obviously dairy is a different world because business turnover is often well out of sync with farmed area, is this the case with beef/pigs/arable? I guess what I am asking is what farm size is ultimately sustainable long-term?

now, about this piece of string you want measured........

(and unless they're outdoors and very widely spaced, wouldnae area be less critical for piggies than anything?)

250 acres of good land could be as much work, or as little, as you want.
However, without acumen and luck, the return - before subs- is very unlikely to match what your investment would return if you sold up.

 

[egbert]

Acreage is your friend @egbert
Being on mains water and discovering a water leak yesterday my fixed costs took a significant turn for the worse this year.

ouch. I feel for you.

 

[Farmertom1988]

Your best source of information will probably be the Farm Business Survey Data. You can get information for your area, enterprise mix and size.
The data will be historical (18 months or more) but will all be produced to a standard methodology so differences are real.

Thank you for that. That is interesting. I have just had a look and see that dairy overheads for a farm our size is around £700 an acre, which is probaly in line roughly with where we are, whereas a corrosponding lowland mixed non-dairy livestock is £400 an acre.

 

[Farmertom1988]

I'm confused. Surely looking at your own farm accounts is the best place to start? Your costs are in there, how difficult is it to look at them and work it out for yourself?

I understand what you mean. We have had a look at our own overheads, and obviously there are some things which would be very quantifiable to work out going to an ex dairy farm e.g paid labour.

But then there are some overheads which may currently be intangible to get at so to speak, such as the electric, we have a farmhouse and two holiday cottages that all run off the farm electric meter, so straight away until we stop milking with the vacuum pump, fridges etc, its really quite difficult to quantify.

I'm just trying to see if any others on here had made the transition from dairy to non-dairy and what experiences they have had.

I spoke to my neighbour who quit dairy a while back, and he just said the biggest difference was how much less post he recieved... which although suggests less bills... is a bit pub talk and you can't beat some actual figures to go off so to speak.

 

[Farmertom1988]

I would like to ask the question, being straight up now. If you owned 250 acres of (good) land outright, and had a heap of good facilities and no borrowings. What sort of income could be had from having beef/pigs/arable on a theoretical farm and how much work would it be? Obviously dairy is a different world because business turnover is often well out of sync with farmed area, is this the case with beef/pigs/arable? I guess what I am asking is what farm size is ultimately sustainable long-term?

I suppose it depends how hard you want to work and how much aggravation you want.

I would think the actual return on capital employed would be very minimal indeed if everything was costed in.

However, if you did that with everything in life you probaly wouldn't bother doing anything.

I think nowerdays returns in dairy are very specific to each individual farm and what milk contract they are on.

We are a non-aligned milk producer and to be honest we would have been better off just renting the farm out and stopping in bed these last 12 months... or going off and working off farm... hence the decision to quit.

 

[Highland Mule]

By fixed costs i would include labour, contractors, machinery repairs, fuel and oil, electricity, machinery depreciation, water, property repairs, insurance, office and telephone and professional fees.

You might, but most of those aren’t fixed costs. true fixed costs are things that apply wether the business is trading or not. Most of what you mention are variable costs (fuel will vary greatly with cultivation being high, from instance, compared to dog and stick sheep.

True fixed costs run at under £10/acre for some farm types.