New data has found there is more than £125,000 of a difference between the top and bottom performing dairy farms in England – figures that could be equally applicable north of the Border.

The results from The Andersons Centre which has been advising farm businesses for more than 45 years, found that the lead performing producers keep costs at a minimum without impacting output or milk quality.

Furthermore, they look to maximise output per hectare instead of per cow and therefore tend to have higher stocking rates. Such producers also concentrate more on what they do rather than dabble in other livestock enterprises to make ends meet.

According to figures from the agricultural advisers, the dairy farmers producing the highest margins in England are paid an extra 1.7p per litre over their lower performing producers. They keep milk clean and drive their farm system to produce the constituent parts demanded by the milk processor.

Going through the variables in turn, the key points found by The Andersons Centre included:

1. Agricultural costs – Total spending between the top and bottom performing farms does not differ significantly, but what they buy is revealingly different. The top performers spend a slightly smaller proportion of their expenditure on overheads such as machinery, and more on variable costs such as fertiliser.

2. Agricultural output – The top performing farms generate a higher output per hectare and per SLU than the lower performers.

3. Contracting – The lead producers rely more use of contractors.

4. Farm area – Top performing farms are slightly larger and are increasing in agricultural area, whereas bottom performers show a small decrease.

5. Stocking rate – Those making the highest margins tend to have significantly more cows per hectare (at 2.2GLU/ha compared with 1.8GLU/ha).

6. Mix of enterprises – Lead performers are significantly more specialised, with the percentage of farming output from dairy at just over 75%, compared with 68% for the matched bottom performers.

7. Milk price – Those at the top end average around 1.7p per litre more than the bottom performers. This difference is highly statistically significant.

8. Agri-environment schemes – Bottom performers have more agri-environment income per hectare, but the difference is not statistically significant after matching.

The report which was published by AHDB also found that there was a further £49,250 between the top and bottom beef and sheep farms south of the Border and a £104,060 difference between the best and worst cereal producers.

Sarah Baker, AHDB head of economics analysis, said: “The farming landscape has changed significantly since we last examined the characteristics of top performing farms, with the removal of subsidies and the introduction of ‘public money for public goods’.

“The report highlights the stark difference in income between the top and bottom performers for each sector covered, after matching for farm size, sector and geographical features. While there are nuances for each sector, the key point to note is that the factors identified are within farmers’ control to address and potentially improve their farm business performance.

“Our aim is to provide farmers with tools and services to help identify where they may be able to make some changes to their businesses with a view to improving performance and having a positive impact on their bottom line.

“While the analysis covers England only, the findings are equally applicable across the UK.”