So you’ve reviewed your machinery…what next?
In April 2018, AHDB reported that UK farms were spending too much on machinery, according to a review of machinery at its monitor farms.
In the review, annual machinery and labour costs ranged from £288 to £593/ha across the farms, which measured from 97 to 1,278 hectares. Machinery accounted for 25-30% of the farms’ wheat growing costs.
During the past few months, monitor farm groups around the country have been looking deep into their machinery strategies and what to do next, led by AHDB’s machinery expert Harry Henderson.
A balancing act
“It boils down to risk management,” Henderson said. “You don’t want to try to reduce your costs so much that you expose yourself to practical risks like machinery breakdowns or running out of time.
“On the other side, however, if too much money in the business is tied up in machinery and replacements, it exposes farms to a different kind of risk.”
Across the Monitor Farm network, Harry and the farmers found that you can’t apply hard and fast rules, such as less than 1.5HP per hectare or below one member of staff per 1,000ha for an all-arable farm.
He said: “As long as a farm business understands the cost of machines, is able to weigh up the potential benefits of contractors and to analyse timelines, then the manager can adjust the system accordingly.”
With the trend towards moving less soil gaining momentum, machinery will be doing fewer hours and so annual running costs will go down. However, costs per hour will increase, due to the costs being spread across fewer hours.
“So it is important to view the way costs are set out,” Harry added. “Although you could be putting just 200 hours a year on a tractor, this does not automatically point to underutilisation – for example, if it only needs to pull a direct drill but does have the capacity to get the job done in ideal conditions.”
It’s not all about money
Risk management isn’t just about the finances, however. As many of the speakers at the recent AHDB Monitor Farm conference explained, they also want a good work-life balance.
Robert Cross, Warrington Monitor Farm host said: “As a father to three children, I find that, yes, spraying and getting the timing right is very important to the actual profitability of the crop but having a work-life balance is very important and I want my children to be able to say to me: ‘You weren’t always gone missing, spraying.’
“So, having a sprayer with a little bit of extra capacity, where it’s not ridiculous in terms of costs but where I’m able to then choose the times I go out or take an hour out in the evening to spend time with my family over a meal is important to me.”