Wales Farm Income Booklet provides new information on the financial performance of farm businesses in Wales

24 November 2014

The latest Wales Farm Income Booklet, published this week, provides new results from the Farm Business Survey (FBS) for 2013-14.   The data shows the variation in performance between the average and the top performers and demonstrates the scope that exists for change.

Published by the Institute of Biological, Environmental and Rural Sciences (IBERS), Aberystwyth University and sponsored by Farming Connect, the booklet will be issued to almost 38,000 farmers in Wales with the latest issue of Gwlad, the Welsh Government’s bi-monthly rural affairs magazine.

Tony O’Regan, Director of the FBS Unit at Aberystwyth University says that many Gwlad readers provide data for the Farm Business Survey.

“Farmers across Wales will appreciate that it contains accurate and reliable information with good size samples for each farm type. This booklet is a valuable tool which will help farmers benchmark their performance and address production costs.

“The consistent factor every year is the range of profitability within the sample farms, for example the top third cattle and sheep farmers retained 32% of output as profit, compared with 19% as average. Similarly top third dairy units achieved 32% of output as profit versus an average of 22%,” said Mr. O’Regan.

According to business consultant and Farming Connect mentor David Thomas of Andersons, comparisons with FBS data can help identify priorities.

“When I meet farmers for the first time, I often ask them to consider why they are actually working in farming. The top third and most progressive of them consistently emphasise the need to make profit and increase capital growth. Although the other two thirds are clearly striving to make a profit, they often refer first to family expectations and other emotional issues. I urge all farmers to focus on financial progress and their profit margins. All businesses need to make sufficient profit to be viable in the long term and consequently sustain lifestyle and personal objectives.

“Every business should answer some basic but critical questions at the end of each year. For example, was your profit enough to grow the business; what percentage of output did you retain as profit and finally, did the business increase its capital worth or did this decline and if so by how much?

“Farmers also need to address their on-farm practices and systems. Are technical improvements needed, have you the right system, breeds and genetics to achieve better results or is it overhead cost control that requires focus?” asks Mr. Thomas.

Mr. Thomas advises that analysing tax accounts and converting them to a format comparable with Farm Business Survey data is a quick and powerful tool which can be used to identify key issues and to consider for example how output compares, whether variable costs are high or low and whether some overheads are out of line with similar farms.

Farming Connect will be using the FBS data booklet at a number of events over the coming months when farmers will be encouraged to use the data to help them set objectives and ensure that their business reaches its potential. For further information or for dates and locations either contact your local facilitator or visit out website