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Pasture for Life - It Can Be Done The Business Case Jonathan Brunyee Senior Lecturer in Farm Business Management Royal Agricultural University Most livestock systems are not viable without CAP support Farm Business Income by Cost Centre


  1. Pasture for Life - It Can Be Done The Business Case Jonathan Brunyee Senior Lecturer in Farm Business Management Royal Agricultural University

  2. Most livestock systems are not viable without CAP support Farm Business Income by Cost Centre 2014/15 (Defra 2015 )

  3. Most livestock systems are not viable without CAP support Farm Business Income by Cost Centre 2014/15 (Defra 2015 )

  4. The environmental and social benefits of pasture-based livestock systems are clear… …We believe the business case is strong too.

  5. Gathering The Evidence •Collated case study info from 12 PFLA farmers in 2013. Presented ORFC 2014 •Worked with AHDB Stocktake consultants to gather detailed financial and physical performance data for 2014/15 from eight farms •Analysed and compared our data to Stocktake figures – average and top third

  6. Robust Data? •Broad sample – not just the best! •Collected by independent consultants •Stocktake benchmarking system •Weighted averages •All internal costs considered (including own labour) But there is more to do in future… •Only a small sample •Mix of upland, lowland, organic, conventional •Mix of routes to market (stores, processors, direct sales) •Only one year •External costs need consideration (CO 2 etc) •And there are three types of farmer…..those that can add up and those that can’t!

  7. Breeding Sheep Flocks (Non SDA Farms) – Stocktake Only PFLA Stocktake Stocktake Average Non SDA Non SDA Top Third Average Gross Output 104.04 104.12 Gross Output less Replacement Costs 93.06 92.69 Feed and Forage Costs 14.15 17.76 Vet & Med 6.37 6.61 Other Variable Costs (bedding, ear tags 6.42 7.80 etc.) Total Variable Costs 26.93 32.17 Gross Margin per ewe 66.13 60.51 Labour (paid and unpaid) 20.97 28.29 Machinery Repairs and Contracting 3.48 5.43 Depreciation 5.58 7.31 Other Fixed Costs 8.76 10.91 Total Fixed Costs (before rent) 38.79 51.94 Net Margin per ewe (before rent) 45.33 8.57 1.1LU/ha 1.0LU/ha Stocking Rate (10 ewes/ha) (9.09 ewes/ha) Net Margin per hectare (before rent) £453 £78

  8. Breeding Sheep Flocks (Non SDA Farms) – With PFLA Figures (3 farms) PFLA Stocktake Stocktake Average Non SDA Non SDA Top Third Average Gross Output 93.39 104.04 104.12 Gross Output less Replacement Costs 89.27 93.06 92.69 Feed and Forage Costs 7.14 14.15 17.76 Vet & Med 5.09 6.37 6.61 Other Variable Costs (bedding, ear tags 4.30 6.42 7.80 etc.) Total Variable Costs 16.53 26.93 32.17 Gross Margin per ewe 72.74 66.13 60.51 Labour (paid and unpaid) 30.02 20.97 28.29 Machinery Repairs and Contracting 6.23 3.48 5.43 Depreciation 2.50 5.58 7.31 Other Fixed Costs 9.92 8.76 10.91 Total Fixed Costs (before rent) 48.67 38.79 51.94 Net Margin per ewe (before rent) 42.71 45.33 8.57 1.1LU/ha 1.1LU/ha 1.0LU/ha Stocking Rate (10 ewes/ha) (10 ewes/ha) (9.09 ewes/ha) Net Margin per hectare (before rent) £427 £453 £78

  9. Breeding Sheep Flocks (Non SDA Farms) – Compared to the Average PFLA Stocktake Stocktake Average Non SDA Non SDA Top Third Average Gross Output 93.39 104.04 104.12 Gross Output less Replacement Costs 89.27 93.06 92.69 Feed and Forage Costs 7.14 14.15 17.76 Vet & Med 5.09 6.37 6.61 Other Variable Costs (bedding, ear tags 4.30 6.42 7.80 etc.) Total Variable Costs 16.53 26.93 32.17 Gross Margin per ewe 72.74 66.13 60.51 Labour (paid and unpaid) 30.02 20.97 28.29 Machinery Repairs and Contracting 6.23 3.48 5.43 Depreciation 2.50 5.58 7.31 Other Fixed Costs 9.92 8.76 10.91 Total Fixed Costs (before rent) 48.67 38.79 51.94 Net Margin per ewe (before rent) 42.71 45.33 8.57 1.1LU/ha 1.1LU/ha 1.0LU/ha Stocking Rate (10 ewes/ha) (10 ewes/ha) (9.09 ewes/ha) Net Margin per hectare (before rent) £427 £453 £78 Rents vary considerably – grass averages around £267/ha (RICS) BPS and AE payments not included

  10. Breeding Sheep Flocks (Non SDA Farms) – Performance Compared PFLA Stocktake Stocktake Average Non SDA Non SDA Top Third Average Flocks in sample 3 26 80 Average flock size (ewes) (not 949 759 551 weighted) Number of full grass grazing weeks 52 48 47 Scanning % 168% 171% 176% Lambs reared per 100 ewes put to ram 135% 141% 143% Average age at sale (days) 175 155 152 Total DM concentrate fed (kg/ewe) 0kg 23kg 28kg

  11. It Can Be Done - Sheep Overview Financial Performance •Higher gross margins - although output (sales per ewe) is down due to lower lambing and rearing rates, variable costs, particularly concentrate feed purchases, are much lower, resulting in a very healthy gross margin •Higher fixed costs - higher labour and contracting costs result in increased fixed costs •Positive net margin per ewe - pasture fed systems show a bigger net margin per ewe than the average farms and rival the top third of producers •Positive net margin per hectare – pasture-fed systems show a bigger net margin than the average farm. To surpass the top third of producers more work is needed on fixed costs and lambs reared.

  12. It Can Be Done - Sheep Overview Physical Performance •PFLA farmers are committed to forage-based systems and concentrate use is eliminated •Animals graze outside all year round •Scanning rates are down slightly •Lambs reared per 100 ewes is less than the average and top third, due to a lower lambing % and more lamb losses •Although it takes 20 days longer to finish the PFLA lambs to comparable weights a longer grazing life can increase the nutrient value of the meat.

  13. Suckler Cows (Non SDA and SDA Farms Combined) – Stocktake Only PFLA Stocktake Stocktake Stocktake Stocktake Average Non SDA Non SDA SDA SDA Top Third Average Top Third Average Gross Output 597.99 526.41 649.66 602.13 Gross Output less Replacement 556.84 464.86 613.06 542.92 Costs Feed and Forage Costs 95.44 105.84 81.53 111.43 Vet & Med 27.73 29.15 40.68 39.35 Other Variable Costs 41.46 49.29 43.09 42.83 Total Variable Costs 164.63 184.28 165.30 193.61 Gross Margin per cow 392.21 280.58 447.76 349.31 Labour (paid and unpaid) 114.90 137.65 116.02 119.33 Machinery Repairs and Contracting 63.50 65.71 55.39 68.52 Depreciation 54.75 76.35 76.64 81.15 Other Fixed Costs 84.68 93.92 102.91 107.90 Total Fixed Costs (before rent) 317.83 373.63 350.96 376.90 Net Margin per cow (before rent) 74.38 -93.05 96.80 -27.59 1.6LU/ha 1.3LU/ha 1.1LU/ha 1.2LU/ha Stocking Rate (1.45 cows + (1.18 cows + (1 cow + (1.09 cows + (where a cow plus calf = 1.1 LU) calves/ha) calves/ha) calf/ha) calves/ha) Indicative Net Margin per ha £108 -£110 £97 -£30 (before rent)

  14. Suckler Cows (Non SDA and SDA Farms Combined) – With PFLA Figures (7 farms) PFLA Stocktake Stocktake Stocktake Stocktake Average Non SDA Non SDA SDA SDA Top Third Average Top Third Average Gross Output 487.37 597.99 526.41 649.66 602.13 Gross Output less Replacement 436.26 556.84 464.86 613.06 542.92 Costs Feed and Forage Costs 33.53 95.44 105.84 81.53 111.43 Vet & Med 21.07 27.73 29.15 40.68 39.35 Other Variable Costs 37.89 41.46 49.29 43.09 42.83 Total Variable Costs 92.49 164.63 184.28 165.30 193.61 Gross Margin per cow 343.77 392.21 280.58 447.76 349.31 Labour (paid and unpaid) 127.91 114.90 137.65 116.02 119.33 Machinery Repairs and Contracting 71.79 63.50 65.71 55.39 68.52 Depreciation 100.41 54.75 76.35 76.64 81.15 Other Fixed Costs 98.95 84.68 93.92 102.91 107.90 Total Fixed Costs (before rent) 399.06 317.83 373.63 350.96 376.90 Net Margin per cow (before rent) -55.29 74.38 -93.05 96.80 -27.59 1.1LU/ha 1.6LU/ha 1.3LU/ha 1.1LU/ha 1.2LU/ha Stocking Rate (1 cow + calf/ (1.45 cows + (1.18 cows + (1 cow + (1.09 cows + (where a cow plus calf = 1.1 LU) ha) calves/ha) calves/ha) calf/ha) calves/ha) Indicative Net Margin per ha -£55 £108 -£110 £97 -£30 (before rent)

  15. Suckler Cows (Non SDA and SDA Farms Combined) – Compared to the Average PFLA Stocktake Stocktake Stocktake Stocktake Average Non SDA Non SDA SDA SDA Top Third Average Top Third Average Gross Output 487.37 597.99 526.41 649.66 602.13 Gross Output less Replacement 436.26 556.84 464.86 613.06 542.92 Costs Feed and Forage Costs 33.53 95.44 105.84 81.53 111.43 Vet & Med 21.07 27.73 29.15 40.68 39.35 Other Variable Costs 37.89 41.46 49.29 43.09 42.83 Total Variable Costs 92.49 164.63 184.28 165.30 193.61 Gross Margin per cow 343.77 392.21 280.58 447.76 349.31 Labour (paid and unpaid) 127.91 114.90 137.65 116.02 119.33 Machinery Repairs and Contracting 71.79 63.50 65.71 55.39 68.52 Depreciation 100.41 54.75 76.35 76.64 81.15 Other Fixed Costs 98.95 84.68 93.92 102.91 107.90 Total Fixed Costs (before rent) 399.06 317.83 373.63 350.96 376.90 Net Margin per cow (before rent) -55.29 74.38 -93.05 96.80 -27.59 1.1LU/ha 1.6LU/ha 1.3LU/ha 1.1LU/ha 1.2LU/ha Stocking Rate (1 cow + calf/ (1.45 cows + (1.18 cows + (1 cow + (1.09 cows + (where a cow plus calf = 1.1 LU) ha) calves/ha) calves/ha) calf/ha) calves/ha) Indicative Net Margin per ha -£55 £108 -£110 £97 -£30 Rents vary considerably – grass averages around £267/ha (RICS) (before rent) BPS and AE payments not included

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