PROPERTY MATTERS

Be precise

by Kathryn Lewis of Davis Meade Property Consultants

AGRICULTURE is approaching a new era of change with water security and protection, climate change and environmental concerns being some of the key challenges. Rapid advances in technology and knowledge make “precision farming” a key phrase in today’s farming world. Although the phrase is often linked primarily to highly advanced equipment, often only justified when utilised on a large scale, precision farming is something that can be embraced by all agricultural businesses, small or large. The majority of agricultural sectors are currently facing difficult economic times so we at DMPC are advising clients to pare down the phrase “precision farming” and look how it can be applied to their own farm businesses and situations. There’s a wealth of information available at our finger tips and we are advising clients to utilise information such as market reports and trends, predicted commodity prices, details of support subsidies and grant payments to devise business plans and cash flows for the coming years. Farms need to move with the times and operate in a commercial manner if they are to remain competitive and subsequently viable through the tough economic period currently being faced. Although it can often be difficult to forward budget and plan with such volatile commodity prices and uncertainty brought through the CAP reforms, an analysis of a business, including its spending trends, can prove to be a valuable asset. For example, keeping a predicted and actual cashflow on a monthly basis can highlight to the business the times at which financial borrowings are at their maximum. A possible change could be to sell stock or produce earlier/later or to purchase items such as fertiliser and sprays in a different month to keep borrowings, and subsequently finance charges, lower. Although seemingly just a small advantage, this level of precision applied across a number of elements of the business could make the difference between an overall profit or a loss. Again, looking at enterprise costs can highlight potential areas for change. For example, keeping a record of concentrate feed costs and then potentially exploring alternative sources of feed such as overwinter brassicas may, in some situations, flag up ways to decrease costs. At DMPC we are looking to encourage farming clients to keep a keen eye on being efficient in as many areas of their business as possible, to be precise with all decisions made on the farm. Starting off on a small scale of precision farming will, in turn, improve efficiency which could then result in increased productivity and, eventually, the adoption of innovative technologies such as GPS systems to make further cost savings. Precision farming starts at the roots of a business in terms of how it currently functions and operates. Attention to detail is key and analysis of performance is now a must. Market research to establish the most appropriate end market, whether that be finished or store cattle, broiler or egg poultry production, feed or energy crops, will set the threshold for associated costs. There are now many workshops, events, seminars, sources of information and advice available. DMPC are now advising their farming clients to try and set aside a small proportion of time to begin this process of precision farming, to reap the benefits, continue to be competitive and to keep the farming business viable for future generations.

Kathryn Lewis BSc (Hons) MRICS is a land agent with Davis Meade Property Consultants at Oswestry. She can be contacted on 01691 659658, email kathrynlewis@ dmpcuk.com or visit www.dmpropertyconsultants.com

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