Farmers are continually being advised to cut costs and benchmark – key factors which along the inclusion of several others have been confirmed as just a few of the hallmarks of high performing farm businesses, in a new report.

The report – The characteristics of high performing beef and sheep farms in Great Britain – released by Quality Meat Scotland, AHDB and Hybu Cig Cymru (Meat Promotion Wales), presents new analysis of the Farm Business Survey (FBS), breaking down the variations between the best performing farms and other farm businesses.

“When we modelled potential Brexit scenarios, we found that the top 25% of farmers could turn a profit no matter what policy decisions are made," said Sarah Baker, AHDB strategic insight manager.

“This raised many questions, the most fundamental of which was what are the top-performing farms doing differently? This research decisively answers that question and more, empirically and statistically demonstrating the links between certain practices and high performance.”

Based on all available evidence, the project concluded that eight key factors differentiate the top-performing farms and comprise:

• Minimise overhead costs

• Have a clear business strategy

• Set goals and budgets

• Compare yourself and gather information

• Know what the market is and deliver for it

• Focus on detail

• Have a mindset for change and innovation

• Remain disciplined and stick to your strategy

The report, written by Anderson’s, focuses on LFA grazing livestock farms in Scotland, England and Wales mapping out key areas such as farm size, fixed and variable costs and outputs.

It found that the difference in farm business income between the top performing 25% of farms and the lowest performing 25% of farms is about £40,000 per year in Wales, £50,000 per year in England and a massive £60,000 in Scotland.

It also revealed that the top performers have higher costs than the bottom quartile, however that additional spend proved cost effective as they produce considerably more than the bottom performers. For example, in Wales while the top performers’ costs were a third higher, they produce more than double the output of their lower performing peers.

The strongest message from the report is that the higher performing farms had lower overheads than the rest. It claims that no farmer can operate in the top performing quartile without a keen focus on cost control, with the farming examples focussing on ‘low-cost’ production. However, they ensure costs are minimised without hampering performance, hence the top performers collaborate with nearby farms or businesses, keep machinery longer and maintain it well. They also spend time developing and training staff and other key resources.

Those in the top 25% also had a farm strategy, which was written down, discussed and shared between those in the business, thereby making it easier to prioritise what jobs are the most important to achieve the desired outcomes.

Setting goals, budgets and communicating openly with business partners and family and discussing regularly what each one wants to achieve (financial and non-financial), were shown to be other key priorities to improving profit margins, alongside compiling annual budgets – which are checked regularly – to show where the year is planned to go. In doing so, farmers can identify what works well and what doesn't, thereby enabling individuals to adjust farm management if necessary.

And love them or loathe them, benchmarking and comparing individual businesses to others while also gathering other key information were priority for all those in the top 25%. The study found that farms with more information make better choices and generally make more money, which in turn was attributed to benchmarking, discussion groups, informal discussions, regular reading and farm walks.

Other key factors which go to breaking into the top quartile include understanding the market and supply what the market requires. Such producers also communicate regularly with their buyers/outlet to see what would add value to what is being produced in terms of the service that comes with it; delivery dates, speed of loading, etc.

Focussing on detail is a difficult attribute to identify, but the study found it does make an impact on profit margins. Therefore, the report said individuals should look to identify 100 things that could done a little better, and as they are worked through, one by one, consider the cumulative

impact of marginal gains.

According to the report, one of the biggest issues farmers have is addressing whether they have the mindset for change. Farmers have to be focussed on developing innovative ways of working which means thinking about ways to overcome barriers on farm to reach desired goals.

Producers are also advised to stick to the business strategy and business partner(s) work together and cross examine each other. If not, an external paid consultant would.

Ultimately, to move into a higher performance bracket takes more than a rise of market prices

or luck, it means change, sometimes considerable shifts in ways of operating and therefore


To achieve this is arguably more difficult than any technical or management point considered in the study as it involves bravery and self-belief. Nobody should continually do the same and expect different results. Yet more people regret inactivity or indecisiveness than those who regret doing something.

Ultimately, success is about achieving what the individual aspires to achieve, it concluded.