Six things to consider that could benefit your farming business
Published August 29th, 2017
Gathering in the harvest is always a busy time for farmers but it’s worth sparing a thought while waiting for a trailer to load or the ground to dry out to consider the farm business as a whole, beyond the crops and fields.
“Farmers get so engrossed in the day to day of farming it is easy to miss things that could improve the bottom line,” said Mark Morison at the Shrewsbury office of Berrys.
Here he suggests six things to consider that could benefit the farming business:
Despite increasing inflationary pressures and weak sterling, the Bank of England continues to hold interest rates at record lows, albeit with only narrow majorities in favour at the Monetary Policy Committee meetings. In June, the fixed rate cost of funds moved slightly down indicating little concern of rate rises by the banks as yet. Opinion is reflected by some commentators who consider that the probability of a rate rise by the end of next year has dipped from 75 per cent to 48 per cent.
From the farm business perspective the opportunity remains to take advantage of new finance or restructuring before the banks take a firmer line on higher rates.
2 Eco-system Services
Ecosystem services are the benefits provided by ecosystems that contribute to making human life both possible and worth living. Examples of ecosystem services include products such as food and water, regulation of flooding, control of soil erosion and disease outbreaks, and non-material benefits such as recreational and spiritual benefits in natural areas.
Services refer to the human benefits such areas provide and there is increasing interest in the value of their contribution.
How well does you farm deliver? Do your existing assets present business opportunities or should they be enhanced, perhaps through agri-environmental initiatives?
The uncertainty facing agriculture given the current political landscape is a reminder of how exposed businesses can be, particularly where they rely on only a handful of commodities. Diversity in the business can help improve resilience by offsetting poorer prices against potentially better performing alternative enterprises or by moving up the supply chain to improve margins. What are your options?
4 Bench marking
When was the last time you checked your own business performance against others? Regular benchmarking will help identify where you are doing well and any areas of potential weakness to investigate and improve.
5 Health and Safety
We all know it’s no one’s favourite topic but thinking about it is time well-spent, especially at a high-risk time of year like harvest. Do your staff know what they should be doing? Is your insurance in order? Are there any risks caused by unaddressed repairs? It may be a dull 10 minutes to spend now but those 10 minutes could save considerable trauma, red tape and costs later on.
Despite recent grant reductions for renewable energy projects viability still stacks up where there is a demand for on-farm energy. However, projects need careful consideration and there are a wide number of choices to fit around available farm resources and demands. Energy prices will continue to rise in the long term and an investment could go a long way to future-proofing your business. Technology costs are falling so viability is regularly changing.
For more information contact Mark Morison at the Shrewsbury office of Berrys on 01743 290647 email firstname.lastname@example.org