8 key factors that set top-performing farms apart

Eight key factors have been identified by the Agriculture and Horticulture Development Board (AHDB) as setting top-performing farms apart from the chasing pack.

The key characteristics of farms identified in the top-performing 25% of farmers were published in the latest AHDB Horizon report, released for September, titled ‘Preparing for change: The characteristics of top performing farms’.

A hierarchy of importance for these factors will vary for each farm according to the farm system, environment, existing skills, resources and performance on the farm, according to the board.

For the industry overall, the AHDB set the list in order of priority.

This is as follows:
  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;
  8. Specialise.

Regarding minimising costs, it was noted that less money was spent by best performers on producing each unit of output measured on a financial basis.

Key advice given by top-performers centred on: controlling costs; and paying attention to detail and focusing on key things.

It is important to look for ways to trim costs that don’t affect turnover, such as collaborating with nearby farms and businesses, and keeping machinery longer, maintaining it well.

Regarding goals and budgets, high-performing businesses are likely to: set ambitions and long-term goals; undertake management accounting, including budgeting; use comparative data, including benchmarking; seek information and advice through means including farm visits and paid advisors; interact with customers buying from the farm; and adopt formal risk-management strategies.

In terms of comparing oneself with others, the AHDB notes that all top farmers benchmark, learning from each other on where to up performance, with many attending discussion groups.

Information is key, it is highlighted, whether from benchmarking, discussion groups, informal discussions, regular reading, farm walks or a combination of these.

Understanding the market buying one’s product, and recognising what is of greatest value is key to adding value and keeping costs down.

Adjusting a commodity to make an added-value commodity, such as: high-protein wheat, high-protein milk, correct-sized apples, and so on could progressively make a small premium on the produce, it is noted.

Ensuring good communication with one’s buyers should be key.

Attention to detail refers to focus on changing small habits, improving a large number of small things that could be done a little better, to get a cumulative gain.

Mindset for change included having a positive attitude and goal-setting, with following through on these goals being key. Making better use of computers and technology was also noted.

Improving people management earmarks good leadership, motivation and training for good delegation and maximising efficiency.

Finally, more specialised farms tend to be more efficient, according to quoted studies, with specialisation meaning that labour can concentrate on doing the same task and get better at it.

Commenting on the report, Sarah Baker of the AHDB said: “When we looked at what the financial difference in performance is between farms with similar characteristics, taking into account overheads, variable costs and agricultural output, we’ve seen top performers making three or more times more than those in the bottom quartile.

This would equate to an average difference of around £100,000 a year for cereals and oilseeds, dairy, pork, horticulture and potato sectors and around £50,000 a year for beef and lamb.

“Making performance improvements doesn’t have to be about heavy capital investment. More often it’s about doing a range of things well and reaping the benefit from many interdependent ‘tweaks’.”