General margin per acre/ha?

[Overby]

I've been having some varied discussions with some of my neighbours recently about what an expected / acceptable and realistic margin per acre is, in broad terms across the whole arable side of the farm and also per crop. As per usual, the figures vary wildy, from those who will always be realistic (possibly pessimistic) to those who you know will tell you they dig up gold in the shittiest of fields.

Nothing too personal, just wondering what the thoughts are on here in ball park terms?

 

[teslacoils]

£100 an acre profit. After all costs including fbt rent, p&k, lime, and all the extras.

 

[MrNoo]

Last four years have been between £114 (lowest last year) to £174/ac after everything. Total end of year profit divided by acres, nothing scientific

 

[Stuart J]

Last four years have been between £114 (lowest last year) to £174/ac after everything. Total end of year profit divided by acres, nothing scientific

That including or excluding bps?

 

[MrNoo]

That including or excluding bps?

Yes inc

 

[warksfarmer]

I've been having some varied discussions with some of my neighbours recently about what an expected / acceptable and realistic margin per acre is, in broad terms across the whole arable side of the farm and also per crop. As per usual, the figures vary wildy, from those who will always be realistic (possibly pessimistic) to those who you know will tell you they dig up gold in the shittiest of fields.

Nothing too personal, just wondering what the thoughts are on here in ball park terms?

This year £487/acre from group 1 milling wheat. That accounts for all inputs and all machinery operations (stubble to stubble). It does not account for any fixed costs. 5 year average is £250/acre.

 

[ajd132]

This year £487/acre from group 1 milling wheat. That accounts for all inputs and all machinery operations (stubble to stubble). It does not account for any fixed costs. 5 year average is £250/acre.

That’s a gross margin not a net margin

 

[warksfarmer]

That’s a gross margin not a net margin

Yes as I said it takes into account input costs and machinery costs but not fixed costs. Fixed costs vary massively so in my view shouldn’t be used on posts like this.

 

[B R C]

It’s not, gross margin is just from growing the crops, not machinery costs. But I agree using costs including machinery but excluding other ‘fixed’ costs is sensible. Varying labour costs will skew figures massively.

 

[warksfarmer]

It’s not, gross margin is just from growing the crops, not machinery costs. But I agree using costs including machinery but excluding other ‘fixed’ costs is sensible. Varying labour costs will skew figures massively.

Those figures account for labour in the machinery costs, including grain store costs. What it doesn’t include is things like notional rent, no bps, elec, water, debt (none machinery debt), office costs, professional fees etc etc.

 

[B R C]

That’s what I mean, you have included labour in your machinery, lots won’t so difficult to compare unless 100% like for like. I use contractors but what labour would I put in for my own time spent? Everyone values their time differently.

 

[Overby]

Inviting wrath here, but taking the 'joy' of what you do out the equation, can similar margins not be met with the Stewardship options? I know there's a lot of "it's sacrilege" chat going on and I'm not talking about that, in terms of cropping or stewardship...can't be that much difference if 'time spent' put in the mix?

I know i'm stirring the hornet's nest but I'm genuinely interested as some 'discussions' Ive been party too aren't far off warfare currently!

 

[warksfarmer]

Inviting wrath here, but taking the 'joy' of what you do out the equation, can similar margins not be met with the Stewardship options? I know there's a lot of "it's sacrilege" chat going on and I'm not talking about that, in terms of cropping or stewardship...can't be that much difference if 'time spent' put in the mix?

I know i'm stirring the hornet'd nest but I'm genuinely interested as some 'discussions' Ive been party too aren't far off warfare currently!

Yes they can. I genuinely don’t care about producing food anymore. That ship had sailed for this country. The ELMS pilots running since 2018 have a field scale option of green cover at £840/ha. Assuming that remains in place when tiers 2 & 3 are released and then throw in the soil and water plan etc it looks like a no brainer to me.
We’ll have some organic meat as well to sell and that’ll be me for the foreseeable.

 

[B R C]

Yes have approx third going into either 2 or 5 yr stewardship. The 5 yr is on the worst bits, 2 yr to help improve the rotation without having osr or beans.

 

[GeorgeK]

Inviting wrath here, but taking the 'joy' of what you do out the equation, can similar margins not be met with the Stewardship options? I know there's a lot of "it's sacrilege" chat going on and I'm not talking about that, in terms of cropping or stewardship...can't be that much difference if 'time spent' put in the mix?

I know i'm stirring the hornet's nest but I'm genuinely interested as some 'discussions' Ive been party too aren't far off warfare currently!

A lot of people appear to compare stewardship margins to what they think they make on their best field of first WW and conclude they can do much better, forgetting about the 0.2t/a OSR, beans that were mostly fat hen and droughted spring barley. The biggest problem with stewardship is farmers don't trust the RPA or government not to screw them over, and not without good reason

 

[Clive]

Inviting wrath here, but taking the 'joy' of what you do out the equation, can similar margins not be met with the Stewardship options? I know there's a lot of "it's sacrilege" chat going on and I'm not talking about that, in terms of cropping or stewardship...can't be that much difference if 'time spent' put in the mix?

I know i'm stirring the hornet's nest but I'm genuinely interested as some 'discussions' Ive been party too aren't far off warfare currently!

think it will depend very much on how good your soil is and your fixed cost structure

I can see stewardship cutting the area we grow food on significantly but not replacing it completely

i will do whatever makes best business sense - i don’t honestly care if i farm thousands of acres or hundreds and i don’t care if i sell food or environment

 

[ajd132]

Yes they can. I genuinely don’t care about producing food anymore. That ship had sailed for this country. The ELMS pilots running since 2018 have a field scale option of green cover at £840/ha. Assuming that remains in place when tiers 2 & 3 are released and then throw in the soil and water plan etc it looks like a no brainer to me.
We’ll have some organic meat as well to sell and that’ll be me for the foreseeable.

As has been mentioned to you hundreds of times an option that is £840/ha is not going to be widely available, the money is not there!

 

[tjhooker]

As has been mentioned to you hundreds of times an option that is £840/ha is not going to be widely available, the money is not there!

Totally right - there is only so much money and these big ticket options will be targeted / limited

 

[warksfarmer]

A lot of people appear to compare stewardship margins to what they think they make on their best field of first WW and conclude they can do much better, forgetting about the 0.2t/a OSR, beans that were mostly fat hen and droughted spring barley. The biggest problem with stewardship is farmers don't trust the RPA or government not to screw them over, and not without good reason

Stewardship pays out irrelevant of weather, market prices etc. Yes there are examples of people not being paid but you get that in any industry anywhere in the world.

 

[warksfarmer]

As has been mentioned to you hundreds of times an option that is £840/ha is not going to be widely available, the money is not there!

As I’ve replied hundreds of times, we don’t know do we! If the gov want to import food because trade agreements are more valuable that in house food production, then it will be widely available. We will see in due course.