Farmers urged to study fixed costs
Published at 11:05, Tuesday, 30 October 2012
FARMERS are being urged to look closely at their fixed costs in order to keep their farms profitable.
The National Farmers’ Union said the “take home message” from a new study was that fixed costs are a major factor in determining the success of beef and sheep farms.
Its EBLEX Business Pointers benchmarking study found that the top performing producers spent up to 125 per cent less than the poorer faring farms on their fixed costs.
The fixed costs paid by individual producers was found to vary significantly and farms in the top third tended to spend substantially less than those in the bottom third.
EBLEX/ Agriculture and Horticulture Development Board senior analyst Carol Davis said: “Fixed costs include a range of inputs such as labour, power and machinery, contractor charges, administration, property charges and land resource costs.
“By benchmarking their own performance against that of top third producers, as detailed in the Business Pointers report, English beef and sheep producers can pinpoint areas where their input costs are particularly high and concentrate on identifying ways of reducing those costs.
“Beef and sheep producers across all enterprise types have undoubtedly felt the impact of rising variable costs, particular in terms of feed and forage.
“However, this year’s Business Pointers data clearly shows that strictly controlling fixed costs offers producers an opportunity to make significant efficiency gains and ultimately improve their bottom line.”
Published by http://www.nwemail.co.uk
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