Arable enterprises on 25 farms in central and north-east Scotland are getting help to drill down into their fixed costs to enable them to make better management decisions.
Government and EU funding is backing 4Sight Farming, an initiative which will analyse detailed machinery and labour costs alongside variable inputs to provide farmers with a greater understanding of true costs per crop.
Scottish Agronomy (SA) initiated the project in partnership with four other organisations, including co-ops organisation SAOS.
SA senior agronomist Eric Anderson said results from his company’s members had shown that as much as 53% of wheat production costs are associated with machinery, fuel and labour inputs.
“Yet there are no large-scale benchmarking projects that deliver an accurate picture of these costs per crop,” he said.
“By attributing fixed machinery and labour hours to each block of land, it will be clearer to farm business owners where efficiencies can be made and, when combined with lean management tools, create opportunity to transform fixed costs for greater margins.”
George Noble of SAOS said: “This project will allow farmers to make more informed decisions.”
Mr Anderson said examples of a lean management approach could be merging blocks of land to reduce movement between fields or widening a gateway to allow a combine to move independently between fields without the cost of labour and fuel for a tractor and trailer moving the header.
An established online data system will be used by 4Sight Farming to analyse data from five core farmers to give them an in-depth breakdown of their own business, and the data from the other 20 group members will be analysed by EQ Accountants.
The data from both groups will be used to give a range of cost comparisons across operations and crops and form the basis for future discussion groups.