Typically, the largest element of a farm business’ costs are overhead costs. To this end, in order to make possible improvements to margins, many of AHDB’s Monitor Farmers require detailed analysis of their labour and machinery costs.
The reviews that we wish for our Monitor Farmers to undertake include:
• Cost review of each machine with an engine. i.e. tractor, combine, sprayer & telehandler. (telehandler & trailers etc costed on a time only basis) Detailing; depreciation, repairs, interest, insurance, total standing cost, total hrs/yr & cost per hour.
• Cost review of each implement with details as above.
• By matching implement to tractor, provide an operation cost per hectare including fuel consumption and labour cost based on workrate, ha/hr.
• The review will give a detailed view of mechanised operation cost across the farm business in a £/ha format.
• A full labour profile for each business is also required.
• Using the operational costs, Record the ‘average year’ crop establishment cost, for combinable crops or potato crops. List the operations used.
• Summary and Recommendation; Produce a paragraph on recommendations (at least 3 points ) for the farm business to identify and evaluate (£) areas and actions where resource efficiency (labour time and work – life balance, machine capacity, fuel efficiency and work rates for example) could be improved in the face of reduced income from rural payments.