Size matters: Tenants team up to farm on a landscape scale across the Walsingham Estate
Two north Norfolk farmers have pooled resources to drive down costs, share machinery and farm a larger area in a bid to "future-proof" their businesses. CHRIS HILL reports.
With uncertain times looming, two tenants on a Norfolk estate agreed that increased scale was the best way to safeguard their future – so they teamed up to maximise farming efficiencies.
Mark Fletcher and James Woodhouse have pooled resources to form Pilgrim Farming, which now operates across all the in-hand land owned by the Walsingham estate.
The collaboration involved more than three years of negotiations and complex calculations on the exact labour and machinery requirements, selling duplicated equipment as the streamlined new business took shape.
But after the firm’s first 12 months, provisional estimates suggest it has made a cost saving of £173 per hectare, across 1,400 arable hectares.
And that’s an encouraging figure for the two partners who were seeking ways to drive down costs, build economies of scale, and future-proof their farm incomes.
Second-generation farmer Mr Woodhouse rents 430 acres on the estate, but also runs a contracting business working across 1,200 hectares of land, plus a share farming arrangement in south Norfolk.
Meanwhile Mr Fletcher is a partner in his father’s business, which includes the tenancy of 240 acres at Walsingham, as well as other contract farming agreements. But with no option to take over the family’s tenancy, he said a new approach was needed.
“The estate decided that part of their policy was to take all of their farms back in-hand when they came up, so succession was not an option for me,” he said. “It meant looking for other ways to farm. Walsingham came up with the solution. They were keen for me stay within the estate and by working with James on their in-house contracting, it suited all parties.
“Before that offer came along, myself and James were already talking about sharing certain machinery. The offer from Walsingham was the final carrot to make it happen. We were talking about sharing drill and a cultivator and a tractor, but with this offer it made more sense to put the two businesses together to form a separate company.”
Mr Woodhouse said finding economies of scale was vital for farmers in the current financial climate.
“I decided from an early age that I wanted to farm, but our farm was not big enough to live off,” he said. “So I looked for opportunities and started a contract for share farming at a farm in South Norfolk and some land at Downham Market.
“But more recently I have been contract farming a farm next door to me at Walsingham and then I took on some contract farming with the Walsingham Estate, so I basically built up a contract farming business.
“The Fletchers were doing a very similar thing but they were also contract farming for Walsingham estate, and that is where we got together to see if we could achieve some economies of scale.
“Unless your head is in the sand you have got to look at options like this, because the bottom line of farming is not getting any better.”
The rationalisation of equipment for Pilgrim Farming saved three tractors, one sprayer, two cultivators, two trailers, one beet drill, one fertiliser spreader, while new equipment bought includes a 24m Househam sprayer, and a new John Deere frontline tractor. The company employs two full-time and one part-time worker.
The two original family businesses, RP Fletcher and R and J Woodhouse, still exist, but Mr Woodhouse and Mr Fletcher are also the directors of Pilgrim, which contracts all the in-hand land on the Walsingham Estate.
COST CONTROL IS KEY
With Brexit bringing changes to farm subsidies and uncertainties over trade, business efficiency and cost control have never been more important for farmers.
That’s the message from Rob Hughes, a partner in the agri-business consultancy at Brown and Co in King’s Lynn, who brokered the collaboration deal for Pilgrim Farming.
“If you are going to survive in this uncertain post-Brexit world, you have got to be more cost-oriented,” he said.
“The [Walsingham] estate’s business position was they recognised that a 300-acre arable farmer and a 200-acre arable farmer are always going to have a dappled future. They will have moments in the sun and moments in the shade, and it will never be great.
“But they said: If we give all our in-hand farming across to you, you can do it for as long as you continue to co-operate.
“My own view on this is if you plan it carefully and get the right people with the right objectives – which is to farm more land to drive costs down – there is no reason this cannot be a very replicatable model for any farmer. There is another successful venture like this in west Norfolk, and maybe a handful nationally.
“But it takes time. This process started in February 2013. That was the gestation period for Pilgrim, because it was quite a new concept and there are certain elements of inter-generational change going on here so it took a while to get to a situation where all three parties could sing the same song.
“The lesson here is that it might take longer than you think to do these things. You might have two sons saying this is the way forward, and two dads saying we have never done it like this before, so why changes things now? That was not the case here, but there were a lot of things to consider.
“The most important thing is the chemistry between these two guys. If they didn’t get on it would not work. It is no good just saying: We are neighbours so we need to be partners. It won’t necessarily work like that.
“There are a lot of people sharing a bit of kit because they couldn’t individually afford a new combine, or whatever. That is a good entry point to developing that partnership further.
“Scale does not always bring results, but it generally does. The main difference between people making money or not making money is the ability to manage the business. In this business we have got a really robust structure because we have got two people who are very capable of managing the business and challenging each other.”