The Meadow Farm model has been updated for the LAMMA show. It is a notional 154 hectare (380 acre) beef, sheep and arable holding in the Midlands and is typical of many family farms. It consists of grassland, with wheat and barley for livestock feed. There are 60 spring-calving suckler cows with all progeny finished, a dairy bull beef enterprise and a 500 breeding ewe flock. Two family members currently work full-time on the farm.
In most years, the business makes a loss from its farming activity. This has continued despite stronger livestock prices in recent years – as shown in the table below. It has required the BPS (and a small Countryside Stewardship (CS) scheme) to bring it back into profitability. The decline in the BPS, along with high costs and static output will test this enterprise.
For the 2024/25 year the farm’s CS has ended and the business has taken up the opportunities offered by the Sustainable Farming Incentive (SFI). This brings in significantly more income than the CS, although there are costs to collect the SFI, such as establishing leys (which have been included in the farming margin). The figures for 2024/25 are based on SFI 2023 and there may be more opportunity for this farm when the new ELMs offer for 2024 opens in the summer.
The table below shows the final results for 2022/23, an estimate for 2023/24, and a forecast for 2024/25 including the SFI income. We have also included a ‘Restructure’ for Meadow Farm.
Aside from Government support, there can be other ways to improve farm performance by taking a more fundamental look at the farm business. Many of these types of mixed farm are simply undertaking too many enterprises with each not having enough scale. This leads to a high cost structure. The figures for Meadow Farm are shown after a restructure which sees the dairy beef enterprise discontinued and suckler progeny sold as weaned stores, rather than as finished cattle. The sheep enterprise is increased from 500 ewes to 700 ewes and the arable land is fully contracted out. There is also a rationalisation of the farm machinery.
One key point is that some of the proprietors’ time is freed-up by the changes. This gives an opportunity to earn more income off-farm and, as a result, drawings reduce. Diversification may be another way to usefully employ this time (although no additional non-farming income is included in our figures). However, the proprietors must be prepared to accept and embrace a different way of doing things.
Results of an analysis Andersons have undertaken for the AHDB shows the key characteristics of top-performing farms. One of the traits found in farms that out-perform their peers is having a mindset for change and innovation.