Tag: Meadow Farm

Andersons has updated its Meadow Farm model.  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 model is managed on a real-time basis and provides an accurate representation of business structures and changes in annual performance.

The table below shows the results for the last two years and an estimate for the current year, to the end of March 2018, plus a forecast for 2018/19.  The 2016/17 year received a boost from the weakening of Sterling, following the UK’s decision to leave the EU.  The current year is expected to see further improvement, following better than expected livestock values and improved crop prices and yields.  In addition variable costs have not increased by as much as expected. 

Support payments have increased for 2017/18 as the farm has entered into the Countryside Stewardship Scheme.  Although some land has had to be taken out of production to achieve this, it has not greatly affected gross margins as it tended to be marginal areas that were put into the scheme.  CSS incomes has helped boost profitability, but makes this farm even more reliant on support for profit than it has been in the past. 

The situation is not forecast to be as good for the coming 2018/19 year.  Both the livestock and the crops gross margin are budgeted to fall, due to lower prices and an increase in variable costs.  The purchase of a new mower also increases the overheads, bringing the margin from production back to around 2016/17 levels.  The €:£ exchange rate is forecast to remain in the region of 85p maintaining BPS payments at a similar rate in 2018/19.