What are the 8 key characteristics of top-performing farms?
PUBLISHED: 10:46 28 September 2018 | UPDATED: 11:19 28 September 2018
The eight key characteristics of top-performing farms have been underlined in an industry report.
The Agriculture and Horticulture Development Board (AHDB), whose previous studies had concluded that only the top 25pc of farmers would remain profitable regardless of all potential Brexit scenarios, sought to answer the question of what factors differentiated those top performers.
Although these will vary for each unique farm, the study says the most significant factors across the overall industry, in priority order, are:
1. Minimise overhead costs
2. Set goals and budgets
3. Compare yourself with others and gather information
4. Understand the market
5. Focus on detail
6. Have a mindset for change and innovation
7. Continually improve people management
To compare farms of varying sizes, the study measures the return generated by a farm as a proportion of its output. It shows the top 25pc of farms, across all sectors, perform 1.8 times better than the bottom 25pc – which translates into a significant difference in profits.
In 2014/15 to 2016/17, the bottom 25pc lost £34,600 per farm from agriculture, and lost £11,200 overall after subsidies and diversification, says the report. Meanwhile, the top quartile of farmers made £42,000 from farming, and more than £115,000 in total.
The report says: “More than 70pc of the difference between top and bottom quartile farms is due to decisions made by the farmer. The factors a farmer cannot change are mostly of small importance to performance.
“While there are scenarios where farming could become more profitable after Brexit, we cannot depend on these outcomes and most farms will need to work to become more competitive to retain a viable long-term and sustainable business. It will be the decisions made on farm that will determine your future.”