Machines and labour costing some dearly

Farmers recommended to make efficiencies such as sharing resources with their neighbours

Some farmers are spending almost twice as much on labour and machinery as others, according to Scottish land agent Mary Munro.

She said while labour and power costs on top-performing units average less than £300 a hectare (ha), the same figure can be almost double that on the industry’s highest-cost farms.

“This suggests there is scope to reduce fixed costs on many holdings by £100/ ha or more,” said Ms Munro, head of farming in Scotland for Strutt & Parker.

Potential cost savings for growers include making sure they are using the correct capacity of machine for their farm size, while exploring simple sharing opportunities with neighbouring producers can also be a major cost-saver.

Machine capacity is an easy starting point and a well-utilised six-metre farm drill will cover 600ha of drilled area, and a sprayer will cover at least 26ha of cropped area per metre of boom.

As for sharing with a neighbour, Ms Munro said collaboration does not need to involve a complicated joint venture.

“Machinery can often simply be shared, and any cost differences invoiced between the two businesses,” she said.

Even though planning in terms of rotation may be needed to avoid clashes when both farms may require the same machine, the high cost of key operations such as combining meant there were savings to be made.

“Combining is an expensive operation costing around £66/ha in the UK and nearer £90/ha in Scotland,” she said, adding that sharing with a neighbour or looking at whether it would be better to use a contractor needs to be considered.

However, making savings on labour could be more difficult and employing the cheapest labour can be a false economy, as cost savings could easily be lost in reduced yields, said Ms Munro.

“The priority should be to recruit the best staff and look after them to maximise their productivity,” she added.

There is scope to reduce fixed costs on many holdings by £100/ha or more. MARY MUNRO

Potential cost savings for growers include ensuring they are using the correct capacity of machine.