Study exposes farm profits gap
11:20 07 March 2014
Top farms made a profit more than twice the average, according to leading East Anglian farming management company, Sentry.
It has revealed in its 25th annual benchmarking of farm performance that the top 25pc made a profit of £326 per hectare or £131 acre before single farm payment and finance charges.
Based on the figures of Sentry, one of the county’s leading farming groups which manages more than 22,000 ha or 54,360 acres, it shows that the average farm made a profit of £159 ha or £64 an acre.
However, farm income has come under greater pressure partly because of poorer yields and lower prices and a £2.30 ha increase in total costs.
Trevor Atkinson, who is the group’s technical manager, said that the industry must respond to the squeeze on income. Although farming’s income had fallen by 7.6pc on the year, partly because of the wettest summer for a century and then the long, cold, prolonged spring, there was a wide gap between the top 25pc and average businesses.
“Managing a business with rising costs and falling output prices is much more challenging,” he added.
Sentry, which was founded in the 1970s and is based at Willisham, near Ipswich, runs about 20 farm businesses, mainly in the arable eastern side of the county from Essex to Edinburgh.
In terms of wheat crops, the average yield was 7.6 tonnes per ha but the top 25pc achieved 1.1 tonnes ha more and then sold grain for £170 tonne or £12 more than the average. For winter barley, it was a similar picture as the best farmers had an average yield of 6.1 tonnes or almost a tonne per hectare more.
For oilseed rape, yields were a quarter higher for the top 25pc. In sugar beet production, the average grower achieved a yield of 63.7 tonnes while the better producers achieved 68.3 tonnes.
Mr Atkinson, said: “We need to structure our businesses to be flexible so that we can respond to the signals of the market. If we cannot make a profit at operational margin level then we should not be growing the crop. Continuing to produce at a loss is not sustainable and equally sends the wrong signal to the market.”