Meadow Farm Update

The figures for Meadow Farm have been updated ahead of Andersons Spring Seminars in February and March.  Budgets for next year show that this traditional family farm makes a loss, even after support payments are included. 

To recap, Meadow Farm is a notional 154 hectare (380 acre) lowland mixed beef and sheep business typical of many family-run livestock operations across Great Britain.  The farm runs a 60 cow suckler herd and a 500 ewe mule sheep flock; in both cases finishing all progeny.  There is also a small dairy cross bull beef enterprise and 32 hectares (80 acres) of feed wheat and feed barley is grown.  The business is managed on a real time basis and provides an accurate representation of business structures and changes in annual performance.

The 2014/15 year sees a significant fall in the livestock gross margin, this is largely due to depressed beef prices.  Some recovery is expected for the 2015/16 year. Lamb prices have improved by almost 10ppkg dw between 2013/14 and 2014/15.  Slightly better prices for 2015/16 and lower fertiliser costs see the crop gross margin increasing.

The 2015/16 year sees the end of the ELS agreement (half way through the year) and no replacement CSS agreement.  Rent costs have also increased significantly. The FBT land was is due a review this spring and it is budgeted to rise by £80 per hectare, to £320 per hectare (still below that of some tenancies).  The result is that the farm makes a small loss even after support. 

It is possible to do something about profitability on such holdings however.  The final column in the table shows the results after a significant restructuring.  This involves ceasing the bull beef enterprise and the sheep flock increasing to 700 ewes.  The arable area is then contract farmed.  Although the margin from production remains negative once support payments are added a healthier profit is achieved.