Stand Strutt & Parker will be attending Cereals LIVE this year

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Strutt & Parker will be attending Cereals LIVE this year 10-11th June 2020​ Across the two days our Farming team will be available on virtual Stand 204 to discuss our latest research documents, the challenges and opportunities facing arable farming businesses and answer any questions. We will also be delivering a number of short 15-minute presentations with Q&A sessions on a range of topics and these are free to attend. Wednesday 10th June 10am - 2021 Crop Planning, Jock Wilmott will offer an insight into 2021 crop-planning decisions. 12.30pm - Contract Farming Results Harvest 2019, Richard Means analyses our latest results from our annual CFA survey. 1.45pm - Farmland Market Update, Sam Holt discusses the current farmland market. 3pm - Harvest Health & Safety, Robert Gazely talks through how to ensure your business is H&S compliant this summer including meeting social distancing guidelines. Thursday 11th June 10am - Benchmarking, Charlie Ireland explains how benchmarking can help to identify areas for improvement. 11.15am - Scottish Farming Update, Mary Munro gives a Scotland specific farming update including a review of 2020 and messages for next season. 1.45pm - Countryside Stewardship, Helen Gosling discusses the benefits of entering into a new agreement. You will be able to join all of these talks by visiting our stand or clicking here during Cereals LIVE. You can also watch George Badger take part in a webinar discussion on Adapting to ELMS at 11.45am -12.30pm on 10 June as part of the AHDB Theatre programme of events. We hope to see you at some of our talks during the show. ​ Contact us Will Gemmil Head of Farming +44 1223 459471 Email me

 

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2021 Crop Planning with Strutt Parker's Jock Wilmott

Vonage Meetings

meetings.vonage.com

 

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Vonage Meetings

meetings.vonage.com

 

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Harvest Health & Safety with Robert Gazely, Strutt Parker

Vonage Meetings

meetings.vonage.com

 

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Down to earth: Protecting the health of UK soils



There are more living organisms in one teaspoon of soil than there are people on the planet. It’s the lifeblood on which global agriculture relies for its very existence. Yet UK farming’s relentless drive for efficiency has left some of the country’s cereal-growing heartlands degraded and depleted.

‘It’s widely accepted in the industry that we’ve seen a decline in soil health in recent years,’ says Ed Hutley, from Strutt & Parker’s Farming Department. ‘Soil is a living thing and we have given it a fair amount of abuse. As a result, issues are beginning to manifest themselves.’

Professors from Sheffield University made the headlines in 2014 after they suggested that urban soils had more life in them than farmland. Compared with arable fields surrounding the city, Dr Jill Edmondson said allotments had 32% more organic carbon, 36% higher carbon to nitrogen ratios and 25% more nitrogen, and were significantly less compacted.

Dr Edmondson famously suggested that there could be fewer than 100 harvests left in UK fields unless significant action was taken. So how have we got to this stage?

Changes in modern farming practices are a key contributory factor, in particular the use of heavy machinery, which has increased significantly as farming has become more intensive.

‘From the 1970s to today, we have gone from 100hp machines to well in excess of 300hp, and their combined train weights are doing untold damage to small clay drainage pipes,’ explains Hutley.
The resulting compacted soils have contributed to weed pressures such as blackgrass, which thrives in waterlogged soils and holds huge seed returns. The problem has often been exacerbated by machines travelling in marginal weather conditions to satisfy busy schedules.

Save our soils

Other farm practices have also had a significant impact. There are now fewer mixed farms producing arable crops in tandem with rearing livestock, losing a balance that enhances soil health. Pressure on budgets has also led to fewer broad rotations being employed, which help to give the land a proper rest. Many farms will operate a rotation with just three crops, while the more progressive farms can look to as many as eight crops in the rotation to reduce mono-cropping.

The issue of soil health is already on the agenda of Secretary of State Michael Gove, who summed up the challenge in a recent speech. ‘A combination of heavy machinery, irrigation methods accelerating erosion and a determination to drive up yields has meant that soil has become less productive,’ he said. ‘Britain has lost 84% of topsoil since 1850 and the erosion continues at between 1cm and 3cm a year.’

So what is the way forward? Doom and gloom predictions are simplistic but, arguably, quite effective in raising the profile of soil health. What is not so easy is finding the solution. In reality there is no silver bullet, but a raft of options ranging from simple tweaks to major investment and full-scale changes in philosophy.

According to soil expert Dr Liz Stockdale, Senior Lecturer at Newcastle University, the first step is to understand how different locations affect soil quality and health.

‘Soil is unique. The interaction of geology and climate with vegetation creates a unique equilibrium in that situation,’ she explains. ‘You don’t need to understand the science, but what you do need to do is bring together that practical understanding of the soils in the place you’ve been managing with some general scientific principles to keep your production going forward.’

Dr Stockdale believes the focus should be on resilience and biological diversity. ‘Evidence suggests that increasing inputs of organic matter and reducing tillage act together to promote increased biological activity,’ she says. ‘There is some indication that resilience to extreme weather events may be increased as a result.’

The key approach is to take a longer-term view of managing and improving the soil, says Hutley: ‘The farms that are doing things right are not farming with a short term vision. They have a health check on where drains and ditches currently are and know their land type. They’re soil mapping and generally demonstrating good attention to detail, recognising problems and nipping them in the bud.

‘At a more practical level, if they have blackgrass, for example, they have a zero-tolerance to it. Farms are having to change rotations and introduce spring crops to tackle problematic weeds. They are using catch and cover crops to make sure they have ground cover at all times, as well as remedial cultivations to get the land in good fettle. There are some farms where we are doing constant cropping and then using low-disturbance drills to improve the soil quality.’

A ground investment

While a change in philosophy when it comes to soil health costs little more than the time it takes to do the research, implementation will nearly always require a significant financial investment.

Machinery is a key area of expenditure. Shifting from a wheeled to a tracked machine is becoming a more popular option. Modifications to an existing tractor are possible in some cases, but where retrofitting is not an option, the capital outlay on a new machine will require serious investment.

Additionally, in many instances the farm’s existing drills and cultivators will not be adaptable for a wholesale change in farm practice and will mean further investment. Direct drilling, for example, is a specialist job and the price of a second-hand drill usually starts at tens of thousands of pounds.

Less expensive investments involve improving field drainage, which can be as simple as subsoiling, unblocking drains or mole ploughing. These are well-rehearsed practices that require substantially less capital than the wholesale replacement of drains, although this may be required in some circumstances.

Once problems have been rectified, and a farm has the correct equipment at its disposal, well-established precision farming technology can help businesses minimise future compaction. This could be as simple as having GPS devices fitted to machines all the way up to employing full controlled-traffic farming systems across the whole farm.

High quality, high yields The path that farmers decide to take will be influenced by their own situation. However, Hutley believes that investing in soils – be that a time or financial investment – is vital if farmers are to thrive in the global marketplace.

‘The important thing for farmers to be aware of is that UK agriculture holds two strong cards – our soils and our climate,’ he explains. ‘We are in the privileged position of being able to produce high-quality milling wheats and yields per hectare above global averages. That is a huge advantage.

‘We are never going to compete on the global market on tonnage produced, so we need to protect what we are good at. If we are not careful and we neglect our soils, we are not going to have the high quality and yields that are essential for the future of UK farming.’

Case study: Learning the drill

‘The farm is nothing without its soil,’ says Guy Halsey, who runs the 750-hectare Gaddesden Estate, based at Bridens Camp in Hertfordshire. ‘Since 2000, we’ve been working to improve the organic matter of our predominantly heavy clay soils. This has meant no ploughing at all.’

Working with a contractor’s Mzuri strip till drill, the farm has been able to carry out all crop establishments without prior cultivation.

‘We’re making moves towards no-till farming and, this year, nearly all our oilseed rape was established in this fashion,’ explains Halsey. ‘It is a new way of doing things but not something you can go to overnight, particularly on heavy land.’

The improvement in soil structure has not been the only benefit. The farm has also reduced establishment costs as ploughing was slow and relatively expensive. In years of low commodity prices, growing crops more cheaply has helped to boost earnings.

‘This year, I’ve entered a field in the Yield Enhancement Network project, and the soil health indicator said it is right at the top of the scale in terms of being biologically active, which is pretty pleasing,’ says Halsey.

Reducing soil movement across the whole of the farm, with the goal of zero-till cereal establishment, is a longer-term aim, as is achieving year-round ground cover.

‘Generally speaking, we’re moving towards conservation agriculture, which includes continuously covered soil,’ says Halsey. ‘Nature doesn’t leave any soil bare, so why should we? We’re trying to have wide rotations and keep the soil covered at all times.’

 

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Contract Farming Agreements could pay different rates for different crops

A new generation of Contract Farming Agreements designed to maximise flexibility are likely to emerge in response to changes in government support and the introduction of more environmental measures into the arable rotation.

Richard Means, director in the farming department of Strutt & Parker, says a well-structured CFA will remain a very good vehicle to manage a farm as both parties can be incentivised, their skills utilised and economies of scale realised.

But the impending reduction in BPS payments, alongside the introductions of ELMS, will undoubtedly have an impact on the set up of future agreements because of their impact on crop rotations.
“Ultimately, the farmer must still be seen to be taking the risk from growing the crops and the contractor needs to be fairly rewarded for having the retained running costs of labour, machinery and the management skill that they bring to the arrangements,” he says.

“Couple this with larger environmental schemes that might come into the rotations, then we will see more flexible arrangements where each cropping option has different rates for both the basic contractor’s charge and farmer’s retention.

“While that will make it more complicated to administer, it may well be the fairest way of dealing with the changes that are coming.”

The trend over the past two or three years has already been for contractor’s charges to rise as they seek to lock into higher guaranteed returns to reflect higher labour and machinery costs.
The contractor’s charge is the payment per hectare that a contractor receives for providing labour, machinery and management expertise to farm the land under the CFA. It is essential that any contractor has a detailed understanding of their own costings to be able to understand and recognise what return they are achieving through these agreements.
The farmer’s retention is the charge made by the landowner for providing the land and the buildings.

2019 CFA results

Provisional results from Strutt & Parker’s annual survey of Contract Farming Agreements (combinable crop agreements only), show total income to the farmer for Harvest 2019 averaging £392/ha, while income to the contractor is £395/ha – both returns above the five-year average.

The survey is based on the results of 60 agreements covering more than 12,000ha of combinable crops in England, mainly in the East of England, East Midlands and South East.
“The 2019 year produced some good yields and better crops compared with the drought-hit harvest of 2018. However, this large wheat crop put prices under pressure and so limited the increase in crop receipts,” says Mr Means.
“Slightly higher variable and fixed costs were partially offset by higher than expected Basic Payments, so overall net margins were up on the previous year.”

Strutt & Parker Harvest 2019 provisional CFA results (combinable crops agreements only) – A summary

· Total receipts from crops sales, BPS and stewardship payments higher than in 2018 at £1,332/ha, due to higher yields.
· Average variable costs (£439/ha), up on 2018 levels and the highest for four years
· Fixed costs (£112/ha), compared to £97/ha in 2018.
· Contractor’s charge broadly similar to 2018 at £276/ha, leaving a net margin of £506/ha – the highest since 2014.
· Farmer’s retention £285/ha (£270/ha in 2018), leaving an average divisible surplus of £220/ha (£223/ha in 2018).
· Total returns to the farmer average £392/ha (£374/ha in 2018), which is well above the five-year average, but there is wide variation. The income expected for the middle 50% of farmers ranges from £331 to £444/ha.
· Contractor’s total income averages £395/ha (£398/ha in 2018), which is above the five-year average. However, the income expected for the middle 50% of contractors ranges from £343 to £430/ha.
Strutt & Parker publishes separate analysis of CFA agreements which include roots, which shows higher returns for both the farmer and the contractor in 2019.

Strutt & Parker Harvest 2019 provisional CFA results (agreements including root crops) – A summary

· Total receipts from crops sales, BPS and stewardship payments similar to 2018 at £1,361/ha.
· Average variable costs down from £404/ha in 2018 to £382/ha in 2019.
· Fixed costs £162/ha (£193/ha in 2018).
· Contractor’s charge at £230/ha (£249/ha in 2018), leaving a net margin of £587/ha.
· Farmer’s retention £281/ha (£286/ha in 2018), leaving an average divisible surplus of £302/ha.
· Total returns to the farmer averaged £440/ha (£397/ha in 2018).
· Contractor’s total income was £381/ha (£375/ha in 2018).

For a detailed breakdown of receipts, costs and income to the farmer and contractor from CFAs over the past decade, please request a copy of the full English Contract Farming Agreement Survey results.
The 2019 provisional results are based on estimates of crop yields and financial performance as at 31 May 2020. Final results based on actual yields, income and costs will be produced in late 2020.

 

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The benefits of joint venture agreements in farming

Collaboration between neighbouring farmers can deliver meaningful cost savings and open up opportunities for generating new income.
So could a joint venture be the right path for your farming business?

Charlie Ireland, director in the farming department based in the Oxford office of Strutt & Parker, has advised a number of farming businesses on joint ventures. He believes that collaboration between farmers is likely to become more commonplace, as farmers seek to address the financial gap created by the phasing out of direct payments.

In our latest edition of Land Business Magazine we inviestigate this the opportunities in further detail including looking at a case study of a joint venture which farms about 2,000ha of combinable crops based at

Harps Farm near Bishop’s Stortford in Hertfordshire

Click here to read more

 

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Our latest Land Business magazine is now available

Over the past few months the Covid-19 pandemic has had a profound effect on all of our personal and business lives; at a time when we were already preparing for a period of massive transformation in the countryside.

Against such a backdrop, there is huge uncertainty and that naturally generates worry. But it is at times like these the ability to stay positive, deal with setbacks and innovate become more important than ever before.

So in this digital issue of Land Business, we explore some of the ways landowners can build business resilience for the future:

• How farmshops have responded to the Covid-19 crisis to support their local communities.
• Why managing your mindset can be a key factor in how your business performs.
• How landowners can unlock the value of carbon from woodland and trees.
• Where do current opportunities lie in the green energy sector?
• How collaborative ventures could offer significant benefits to farming businesses.
• Why the concept of Biodiversity Net Gain could provide a new market for farms and estates.

We also bring you an update on key policy changes in the pipeline, to give you an overview of the regulatory changes that will impact farms and estates over the coming years.

Click to read the magazine on our website