General margin per acre/ha?

[Brisel]

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.

What Lee has quoted looks like more of an Operating Margin. You'd use this with more diverse enterprises that have very different machinery requirements, organic etc & is probably a better benchmark than a gross margin. The tricky bit in a mixed business is calculating what that is unless you have very good disciplined records.

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!

As above, define the "margin." CS/ELMS will carry a different cost structure to arable - knowing where (and quantifying) your underperforming bits would be put to better use is not an easy task.

What happened to the "topper farming" that Mid Term Review was going to create in 2005? Most people just seemed to carry on as before and treat the change in title of their payment as a job to keep the DEFRA media department busy. That is not the case this time!

 

[Cowcorn]

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.

You hope !! If the gov want cheap imports as part of their new trade strategy then thats what will happen . As regards the small amount of people engaged in Ag ???
Whats that Norman Tebbit said about the unemployed back in the eighties ?? Something about getting on their bike and looking for work . Thats the future im afraid not large payments for scratching your arse and admiring the scenery
The french and the Irish are not available now in the post eu future to temper the worst instincts of the uk political class when it comes to " handouts "
Of course the probably will throw a few shillings around to placate the NFU and the CLA but not nearly enough to make a career out of it

 

[Overby]

You hope !! If the gov want cheap imports as part of their new trade strategy then thats what will happen . As regards the small amount of people engaged in Ag ???
Whats that Norman Tebbit said about the unemployed back in the eighties ?? Something about getting on their bike and looking for work . Thats the future im afraid not large payments for scratching your arse and admiring the scenery
The french and the Irish are not available now in the post eu future to temper the worst instincts of the uk political class when it comes to " handouts "
Of course the probably will throw a few shillings around to placate the NFU and the CLA but not nearly enough to make a career out of it

For the next few decades every Govt will be creaming their strides over the environment and reaching carbon zero etc...I bet there'll be plenty money for that....up to us in the industry to make it work

 

[farmerm]

Well over both arable and pasture I need £100/ac to cover my time and BPS to give a return on capital....

 

[warksfarmer]

Well over both arable and pasture I need £100/ac to cover my time and BPS to give a return on capital....

BPS is going and won’t be replaced. ELMS is not BPS and many people need to get their heads around it. ELMS pays out but will cost money to put in place. BPS just pays out.

So assuming BPS is £80/ac what you really need is £20/ac for your time.

 

[farmerm]

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

I am not sure that it will cut the growing area all that much. Farmers can claim BPS and not grow a crop now. Elms will have a smaller budget in real terms so what will the attraction be in getting paid, on average, less per ha than BPS to not grow a crop....

 

[warksfarmer]

You hope !! If the gov want cheap imports as part of their new trade strategy then thats what will happen . As regards the small amount of people engaged in Ag ???
Whats that Norman Tebbit said about the unemployed back in the eighties ?? Something about getting on their bike and looking for work . Thats the future im afraid not large payments for scratching your arse and admiring the scenery
The french and the Irish are not available now in the post eu future to temper the worst instincts of the uk political class when it comes to " handouts "
Of course the probably will throw a few shillings around to placate the NFU and the CLA but not nearly enough to make a career out of it

They aren’t bothered about the small number of people involved in Ag. Why would they be? They don’t owe us anything.

 

[teslacoils]

Govt is about to spaff millions on the hugely carbon producing and visibly inefficient UK steel industry supporting 5000 jobs. Top green credentials there.

 

[farmerm]

BPS is going and won’t be replaced. ELMS is not BPS and many people need to get their heads around it. ELMS pays out but will cost money to put in place. BPS just pays out.

So assuming BPS is £80/ac what you really need is £20/ac for your time.

Yes, you and I are on the same page, I have since it was for announced been shouting ELMS is not a replacement for BPS but rather a replacement of Countryside Stewardship and represents a big cut to farm incomes for most producers.

 

[4course]

margin/acre is i fear a historic mark as nowadays i find it hard to think of any farmers local to me who dont have some form of of non direct farming income and very few are purely farm commodity producers wether livestock or arable though the farm plays an important role as a base for these ventures

 

[warksfarmer]

Yes, you and I are on the same page, I have since it was for announced been shouting ELMS is not a replacement for BPS but rather a replacement of Countryside Stewardship and represents a big cut to farm incomes for most producers.

Sat in on a zoom meeting today about the industry in general and 80% (approx 30 people) all thought nothings going to change and ELMS will cover BPS. Blissfully unaware the rug is about to be pulled from under them.

 

[warksfarmer]

margin/acre is i fear a historic mark as nowadays i find it hard to think of any farmers local to me who dont have some form of of non direct farming income and very few are purely farm commodity producers wether livestock or arable though the farm plays an important role as a base for these ventures

That’s spot on. 20 yrs ago we were all told by the ‘experts’ to have management accounts for each enterprise so you could see what’s worth doing or not.

Today it’s ‘agribusiness’ where everything needs to be in the pot to carry on.

I’ve said before but I literally don’t care if people starve to be honest. The U.K. farming industry isn’t respected any longer. The general public are disconnected from how food is produced because the NFU are crap at their job so I’m happy to mothball and grow carbon to sell to the commercial industry and go fully into stewardship.

 

[Steevo]

Sat in on a zoom meeting today about the industry in general and 80% (approx 30 people) all thought nothings going to change and ELMS will cover BPS. Blissfully unaware the rug is about to be pulled from under them.

Sounds like denial to me. Head in the sand? I’m surprised the penny hasn’t dropped with the majority.

 

[warksfarmer]

Sounds like denial to me. Head in the sand? I’m surprised the penny hasn’t dropped with the majority.

I actually think it’s stupidity to be honest. So use to being subsidised since IACS that they believe it’ll always be there under a different name. They won’t realise until day to day running starts eating into their savings. It’s only then that the quadtrack and recreational tillage equipment will start swamping the market and they realise the £500,000 combine doesn’t stack up when wheats £120/t due to world markets.
The Range Rover sat on the drive at £2,000/month lease price and its weekly £100 fuel fill up will suddenly seem less pleasing.

 

[farmerm]

Sat in on a zoom meeting today about the industry in general and 80% (approx 30 people) all thought nothings going to change and ELMS will cover BPS. Blissfully unaware the rug is about to be pulled from under them.

some folk live in cloud cuckoo land!

 

[4course]

That’s spot on. 20 yrs ago we were all told by the ‘experts’ to have management accounts for each enterprise so you could see what’s worth doing or not.

Today it’s ‘agribusiness’ where everything needs to be in the pot to carry on.

and from your other post its clear to me that an awful lot of farmers particularly those producing basic commodites wether arable or livestock have not grasped that in 5 years time the bps will be all but gone and they will need to generate an extra £100/acre ( by that I mean multiply your acres by 100 and work out how you are going to increase your profit not income by that much)to have any hope of just standing still and that isnt going to come from some butterfly scheme

 

[teslacoils]

When I started in 2004 sfp was going to do this, that or the other. So, I've seen a fair few schemes now that have done naff all. And all have come with s variety of consultants saying this, that, the other. I'll worry when the details come out.

 

[Two Tone]

Define Margin/acre?
I think what @mjdboor means is NFI/acre.
I also think it should include BPS and stewardship incomes.

Gross margin will only include Variable costs of seed, ferts and sprays.
It won’t include any Fixed costs, being power, machinery, interest and finance charges, labour or rent (including notional rent).

It always amuses me that in reality, what we call Variable costs are relatively stable, therefore “Fixed”.
Whereas what we call Fixed costs will vary tremendously between one farm and the next.

So, this thread should ask what is the general Net Farm Income/acre. Or to put it more simply Profit/acre.

And when it comes to the answer, I’d say that on average, that figure has generally been about £100 to 120ish / acre for just about as long as I can remember!

 

[ajd132]

Sat in on a zoom meeting today about the industry in general and 80% (approx 30 people) all thought nothings going to change and ELMS will cover BPS. Blissfully unaware the rug is about to be pulled from under them.

Had this conversation with a consultant friend the other day. I’ve always said prepare for absolutely nothing and whatever they do give us we can spaff away if we want. He said 80% of farms are screwed and wheat being £200t+ has made it even worse because people are in a false sense of security and have taken their foot of any kind of gas around looking at what to do.

 

[ajd132]

margin/acre is i fear a historic mark as nowadays i find it hard to think of any farmers local to me who dont have some form of of non direct farming income and very few are purely farm commodity producers wether livestock or arable though the farm plays an important role as a base for these ventures

This is part of the issue though, farmers being encouraged to subsidise their farming with wedding barns, glamping and a farm shop and then calming it ‘agri business’ . It’s not agri business, it’s subsidising production in many cases with another business, simple as.
this has all detracted from the business of growing and is part of the reason why actual farming is so stagnant and so reliant on being propped up.