A new report by major industry organisations has revealed eight key factors that are the hallmarks of a high performing farm business.
The report presents new analysis of the Farm Business Survey (FBS), breaking down the variations between the best performing farms and other farm businesses.
And when the report collaborators, which include the AHDB, Hybu Cig Cymru – Meat Promotion Wales (HCC) and Quality Meat Scotland (QMS), modelled potential Brexit scenarios, it was found that the top 25% of farmers could turn a profit no matter what policy decisions are made.
AHDB Strategic Insight Manager Sarah Baker, said: “This raised many questions, the most fundamental of which was what are the top-performing farms doing differently?
“This research decisively answers that questions and more, empirically and statistically demonstrating the links between certain practices and high performance.”
The project concluded that eight key factors differentiate the top-performing farms. They are:
• Minimise overhead costs
• Have a clear business strategy
• Set goals and budgets
• Compare yourself and gather information
• Know what the market is and deliver for it
• Focus on detail
• Have a mindset for change and innovation
• Remain disciplined and stick to your strategy
The report focuses on Less Favoured Area (LFA) grazing livestock farms in Scotland, England and Wales mapping out key areas such as farm size, fixed and variable costs and outputs.
It found that the difference in farm business income between the top performing 25% of farms and the lowest performing 25% of farms is about £40,000 per year in Wales, £50,000 per year in England and £60,000 in Scotland.
The analysis also revealed that the top performers have higher costs than the bottom quartile, however that additional spend is worthwhile as they produce considerably more than the bottom performers.
For example, in Wales while the top performers’ costs were a third higher they produce more than double the output of their lower performing peers.
The report was financed from the £2 million fund of AHDB red meat levies ring-fenced for collaborative projects.
