Scottish Farm Enterprise
Performance Analysis:
Additional Analysis of the 2013-14 Farm
Accounts Survey
Rural and Environment Science and Analytical Services
Agriculture Statistics
19/08/2015
Page | 1
Contents
Introduction ............................................................................................................................................... 3
Executive Summary ................................................................................................................................... 4
Performance Results ................................................................................................................................. 7
Crop results................................................................................................................................................ 8
Crop Tables .............................................................................................................................................. 10
Winter Wheat .......................................................................................................................................... 11
Winter Barley........................................................................................................................................... 12
Spring Barley ............................................................................................................................................ 13
Mixed Barley ............................................................................................................................................ 14
Winter Oil Seed Rape .............................................................................................................................. 15
Spring Oats .............................................................................................................................................. 16
Winter oats and All Potatoes (combined) ............................................................................................... 17
Dairy and Beef Summary ......................................................................................................................... 19
Dairy Results ............................................................................................................................................ 19
Dairy Cows ............................................................................................................................................... 22
Dairy Table ............................................................................................................................................... 26
Dairy Followers ........................................................................................................................................ 27
Dairy Mixed and Dairy Beef (combined) ................................................................................................. 28
Beef: Hill Herds ........................................................................................................................................ 29
Beef: Upland suckler/herds selling calves as yearling stores (at 12 months) ......................................... 30
Beef: Lowland Suckler/Herds .................................................................................................................. 31
Beef: Mixed Herds ................................................................................................................................... 32
Beef: Finishing ......................................................................................................................................... 33
Sheep Results .......................................................................................................................................... 34
Sheep: Extensive/Hardhill ....................................................................................................................... 34
Sheep: Finished/Store Lamb Production ................................................................................................. 35
Sheep: Lowland (non-LFA) ....................................................................................................................... 36
Sheep: Store Lamb Finishing (long keep) ................................................................................................ 37
Conclusion ............................................................................................................................................... 38
Tables....................................................................................................................................................... 40
Definition of Terms .................................................................................................................................. 42
Contacts................................................................................................................................................... 46
Page | 2
Introduction
The purpose of enterprise analysis is to provide a basic assessment of financial
performance of the main farm enterprises in Scotland. Individual farmers and others,
with an interest in the agricultural industry, are now able to compare individual
enterprise performance against sector averages. Data from the previous years will
also provide a useful guide to performance over time.
The performance of an enterprise is difficult to assess and relies on a number of
factors that cannot be identified through this analysis, such as: natural constraints
(e.g. quality of land, weather, etc.); reason for farming (e.g. financial, personal
satisfaction, etc.); methods of farming; fixed costs of the whole farm business; the
interaction of other enterprises within the farm business and many other factors.
These differences must be borne in mind when making comparisons between farms
and the margin data.
The results are presented as gross margins and are derived from the 2013-14 Farm
Accounts Survey (FAS), which centres on the 2013 crop year. For example, for
cropping enterprises the inputs for the 2013 crop are matched with actual sales.
Results are provided as un-weighted group averages for each enterprise and within
each enterprise where sample sizes are sufficient. Enterprises have been classified as
high or low performers based on their gross margins, This will identify differences
between relatively high performers (those achieving the 25 per cent highest gross
margins), the average for the whole enterprise group and relatively low performers
(those achieving the 25 per cent lowest gross margins); though this does not
necessarily mean that high performing enterprises are being managed more
effectively. The intentions, attitudes, reasons for farming and factors outside the
control of farmers and farm managers have not been considered in this analysis.
The analysis examines four measures of financial performance. The principal measure
is the gross margin which is the value of output minus purchase or replacement costs
and the variable costs.
There are three other additional measures. The first is the overall enterprise gross
income (which shows the overall balance of the enterprise) and second, the
output:input ratio, (which shows how much gross return is achieved per pound (£)
spent per single unit of output (head/hectare) is retained. For the first time, for
livestock enterprises only, a measure of sales/trading performance is also included. It
is clear that, in many cases, top performers are adding more value between opening
valuations (OV) and closing valuations (CV) and the point of sale. Using the formula
((cv + sales - blsa)/(ov + purchases) we can obtain a performance ratio that is derived
from the output value of the enterprise. This is expressed as a percentage of added
value from the opening position in the text.
The four measures each provide a different insight into the performance of the
enterprise. Taken in isolation, these figures may provide a misleading impression of
the performance of an enterprise relative to high, low or average performers, or to
different enterprises. It is intended that each measure be taken into consideration
when drawing comparisons based on this analysis.
Page | 3
Other income streams such as the Single Farm Payment, diversification, other grants
and subsidies and rental income are not considered in this analysis.
Executive Summary
This report on enterprise margin activity covers the 2013 (2013-14) crop, dairy, beef
cattle and sheep production year. Like the previous year the 2013-14 period was a
mixed year for farming in Scotland with poor weather conditions early in the year,
although this improved. This resulted in some spring crops being planted in favour of
winter varieties and livestock having better pasture than in 2012-13.
Table 1 The main enterprise types included are shown in the table below.
Enterprise Type 2013-14
Crop
Cattle
Sheep
Wheat
Spring Barley
Oil Seed Rape
Spring Oats
Dairy
Beef Hill Herds
Beef Upland Suckler Herds
Beef Lowland Suckler Herds
Beef Finishing
Extensive Hard Hill
Finished Store Lamb Production
Lowland (non LFA)
Store Lamb Finishing (Long Keep)
Number in Survey
57
177
30
32
41
15
131
30
83
35
128
34
29
The number of the other enterprises in the survey can be found in the detailed tables.
The area of wheat under cultivation fell by 4% while the area of barley increased by
2% compared to 2012-13. Spring oats area fell by 14% and oilseed rape by 13%. The
area of potatoes in the FAS sample fell by 21% which was larger than the decline in
Scotland overall. Yields for the main crops (wheat and spring barley) increased on the
previous year by around 14%. Oilseed rape yields rose by eight per cent and spring
oats by 12%, with potatoes up seven per cent. However, with less area cultivated, this
meant that overall production was varied across the crop types.
However, the most important factor for Scottish cropping farmers was the fall in the
market price. Prices received for crops, in the FAS, fell around 20% on the year which
has had a significant impact on enterprise income. Average overall winter wheat
revenues fell by six per cent (£27,253) and spring barley by 14% (£28,966).
Page | 4
Table 2 Crop Enterprise Percentage Change for 2012-13 to 2013-14
Crop
Enterprise Type
Winter Wheat
Winter Barley
Spring Barley
Mixed Barley
Oil Seed Rape
Winter Oats
Spring Oats
Potatoes
% change 2012-13 to 2013-14
Area (ha)
-4%
2%
2%
14%
-13%
-14%
-1%
-21%
Yield (t/ha) Production (t)
14%
-12%
13%
14%
8%
-2%
12%
7%
Price (£/t)
9%
-10%
16%
29%
-6%
-16%
11%
-15%
-15%
-13%
-22%
-21%
-21%
-25%
-27%
-7%
Average herd sizes fell by four per cent with only the dairy herd increasing in size by
two per cent (milk yields per cow up three per cent). Beef cattle sale price per head
moved up by around six per cent overall with the individual enterprise results shown
below.
Table 3 Dairy and Cattle Enterprise Percentage Change for 2012-13 to 2013-14
Dairy & Beef
Enterprise Type
Dairy
Dairy
Dairy
Beef:
Beef:
Beef:
Beef:
Beef:
Beef:
Cows
Followers
Mixed & Dairy Beef (combined)
Hill Herds
Upland suckler selling yearling stores
Lowland suckler/herds
Forward stores
Mixed
Finishing
% change 2012-13 to 2013-14
Herd Size Yield per cow (milk)
Total Sales
Litres
£/head
2%
3%
13%
2%
13%
-1%
-16%
-10%
7%
-9%
10%
-8%
9%
-8%
0%
-3%
18%
-1%
7%
- not available
There was a much greater decrease in the sheep flock size between 2012-13 and
2013-14. For example, lowland sheep (non-LFA) enterprises reduced their average
flock size by 32% from 294 to 200 sheep. Enterprise income also fell substantially
between the years. Both hill and lowland production returned 50% less income than
previously (£4,647 and £3,773 respectively). Only store lamb (long keep) increased
overall revenue (up 11%) due to successfully reducing costs rather than in improving
output.
Page | 5
Table 4 Sheep Enterprise Percentage Change for 2012-13 to 2013-14
Sheep
Enterprise Type
Sheep: Extensive/hardhill
Sheep: Crossbred Ewe Production
Sheep:Finished/store lamb production
Sheep: Lowland (non LFA)
Sheep: Store Lamb finishing (short keep)
Sheep: Store Lamb finishing (long keep)
% change 2012-13 to 2013-14
Flock Size
Total Sales
£/head
-3%
-9%
-16%
26%
2%
1%
-32%
-5%
-2%
-12%
- not available
The majority of main crop enterprises returned a positive gross margin with the
number of farms with negative values between two and three per cent, meaning that
over 95% of crop enterprises, had a positive gross margin in the FAS sample
However, the results for cattle and sheep enterprises indicate greater difficulties in
achieving profitable gross margins for these activities.
Beef hill herds still had the largest proportion of negative gross margins at 13%, but
this was down compared to 2012-13 (22%). The remaining beef enterprises had
around seven to eight per cent negative gross margin returns with dairy cows at five
per cent of the total.
Table 5 Negative Enterprise Gross Margins per Enterprise Type
Enterprise Type 2013-14
Cattle
Dairy
Beef Hill Herds
Beef Upland Suckler Herds (12 months)
Beef Lowland Suckler Herds
Beef Finishing
Sheep
Extensive hard Hill
Finished Store Lamb production
Lowland (non LFA)
Store lamb Finishing (Long Keep)
% of Total Sampled
5%
13%
7%
7%
8%
28%
14%
29%
14%
However, it can be seen that sheep enterprises experienced a far higher rate of
negative gross margins than other enterprises in the FAS sample. Specialist sheep
enterprises had nearly 30% negative margins overall, while lamb production systems
were half that at 15%. This would suggest that, even before accounting for fixed costs,
Scottish specialist sheep production experienced a difficult year in 2013-14.
Page | 6
Performance Results
The data in the FAS survey again indicates a wide variation in the levels of financial
and technical performance. For crop production, only the high performing wheat
enterprises increased their margins on the year (by five per cent). All other crop
enterprise performance groups recorded a decrease in their gross margin (table 27).
Table 6 Percentage Change in Yield, Production and Area by Performance Group
Crop
Enterprise Type
Winter Wheat
Winter Barley
Spring Barley
Mixed Barley
Oil Seed Rape
Winter Oats
Spring Oats
Potatoes
% change 2012-13 to 2013-14
Yield (t/ha)
High Average
21%
14%
-12%
9%
13%
4%
14%
10%
8%
-2%
-4%
12%
7%
Low
6%
11%
19%
13%
16%
-
Production (t)
High Average
39%
9%
-10%
14%
16%
24%
29%
39%
-6%
-16%
25%
11%
-15%
Low
-35%
-6%
92%
-5%
130%
-
Area (hectares)
High
Average
15%
-4%
2%
4%
2%
20%
14%
26%
-13%
-14%
31%
-1%
-21%
Low
-38%
-15%
61%
-16%
98%
-
- not available
From the table above it can be seen that most cereal enterprises have increased their
yields and production compared to the year before. Low performers did well to raise
yields utilising less area. High performers increased both yield and area cultivated to
increase production. However, as can be seen from the enterprise gross margin
comparison tables (tables 26 and 27), almost all gross margins have fallen. This is
due to a general reduction in price per tonne of around 20% (on average) for cereals.
Average gross margin for all potatoes types fell by £618 per tonne (13%) compared to
2012-13. Even though yields increased by around seven per cent area cultivated fell
by 20% and price per tonne down by seven per cent to £167 £/t.
During the 2013-14 production year, dairy farm performance in the farm accounts
survey, bounced back with positive increases in both gross margin and enterprise
income. The average increase was around 30% (around £250 per head). Low
performers recovered with an eight per cent increase in yield per cow to 6,344 litres
with the gross margin up 57%. High performers produced almost 2,000 litres per cow
more output than low performers and received four pence per litre more at 33.81ppl.
A note of caution however. The average FAS 2013-14 milk price, pence per litre (ppl),
was 31.46ppl compared to 28.32ppl in 2012-13. The price that dairy farmers are now
receiving, for each litre of milk produced during 2015, has fallen significantly. This has
been extensively documented in industry reports.
Beef enterprises also improved on their 2012-13 performance with both high and low
performers benefiting from better margins. The exception was beef upland
suckler/herds selling calves as yearling stores (at 12 months) which had a large
decline in gross margin performance falling from £33 per head to £18 (down 45%).
This was due to increased purchased concentrates, roughages and sundry costs. In
general, the high performing beef enterprises produced and consumed more home
grown concentrates, resulting in less purchased concentrates and lower sundry
livestock expenses.
Page | 7
For the second year in succession - with the exception of long keep store lamb
finishing - sheep enterprises have lower enterprise gross margins when compared to
2012-13. Negative gross margin values were recorded in extensive hardhill, finished
store lamb and lowland (non-LFA) units. Enterprise incomes were also down, by 50%
in some cases.
The enterprise information shown above takes no account for labour, power and
machinery, property and rent, depreciation and other fixed costs. It is obvious that any
activities with negative gross margins will experience further deepening of losses.
Crop results
Overall average gross margins for crop enterprises ranged from £443/hectare for
winter barley to £817/hectare for winter wheat enterprises. Both were lower than the
previous year. Potato enterprises (a combination of ware, seed and mixed potato
types) were down 13% on the year at £4,299/hectare. Potato and mixed barley
enterprises generated the highest overall enterprise income of crop enterprises at
£108,039 and £52,095 respectively.
Where sample sizes are sufficient to allow comparison between high and low
performing enterprises, the gross margins of high performers in 2013-14 were
between two to three times more than low performers. Winter wheat, winter oil seed
rape, spring oats and potatoes all had high performers with gross margins three times
more profitable than the lower groups.
In general, those crop enterprises that were classed as high performers benefited from
higher yields, slightly better prices (£/t) and lower variable costs than those in the low
grouping. High performers also spent less on seed than their low performing
counterparts. For example, winter wheat high performing enterprises had a yield per
hectare 76% higher than the low group, output value was 84% higher, seed costs
were 21% lower and overall variable costs 10% lower.
Page | 8
Chart 1 Average gross margin per hectare 2013-14
Gross Margin per Hectare
Crops
£1,400
£1,200
£1,000
£800
£600
£400
£200
£0
High
Average
Low
Winter Winter Spring
Wheat Barley Barley
Mixed Winter Winter Spring
Barley Oil Seed Oats
Oats
Rape
Enterprise Type
The chart above displays the difference between the quartile performance groups.
Average Gross Margin per Hectare
Chart 2 Average gross margins between 2012-13 and 2013-14
Crops
£900
£800
£700
£600
£500
£400
£300
£200
£100
£0
2012-13
2013-14
Winter Winter
Wheat Barley
Spring
Barley
Mixed Winter Winter Spring
Barley Oil Seed Oats
Oats
Rape
Enterprise Type
The decline in the average gross margin on the year can be seen above, especially
with oats. Comparing this, with the chart from last year, the continued decline in
oilseed rape value is easily seen.
Page | 9
Chart 3 Output:Input Ratios 2013-14.
Output:Input Ratio
Crops
5.0
4.0
3.0
2.0
High
1.0
Average
0.0
Winter Winter
Wheat Barley
Spring
Barley
Mixed Winter Winter
Barley Oil Seed Oats
Rape
Spring
Oats
Low
Enterprise Type
The average output to input ratio (all 495 farms) is 1.2: for every £1 spent on inputs
the farms in the FAS sample are producing £1.20 worth of outputs. Without subsidies
this figure is 0.9. For cereals overall, the average ratios are: high performers at 3.1,
average at 2.3 and low performing enterprises at 1.6.
Chart 4 Enterprise Income 2013-14
Enterprise Income
Crops
£70,000
£60,000
£50,000
£40,000
£30,000
£20,000
£10,000
£0
High
Average
Low
Winter Winter Spring Mixed Winter Winter Spring
Wheat Barley Barley Barley Oil Seed Oats
Oats
Rape
Enterprise Type
Enterprise income is based on the area in hectares multiplied by the gross margin. It
highlights the differences in production between the performance groups. Where
sample sizes allow it can be seen that top performers are in receipt of up to three
times, or more, than the lowest group. Mixed barley enterprises achieved the highest
overall income at an average of £60,400 (5% increase), while the lowest return was
for oilseed rape enterprises with an average of £6,219 (a fall of 40%). For oil seed
rape enterprises, the ratio of output value to enterprise income for the high performing
enterprises was 0.6 while for the lower performance group, this was only 0.3.
Therefore, these enterprises consumed two-thirds of their crop output value in costs.
Crop Tables
The following crop tables below show a detailed breakdown of the production and
costs for each enterprise.
Page | 10
Table 7 Winter Wheat
Winter Wheat
Enterprise Margin Performance Data
Per Hectare
Summary Data 2013/14
Number of Enterprises
Area (ha)
Yield (t/ha)
Production (t)
Price (£/t)
Gross Margin (£/ha)
High Performers
17
24.0
7.8
186
£206
£1,175
Value of Crop Output
Value of Straw Sold
Total Output Value
Seeds
Fertiliser
Crop Chemicals
Sundry Expenses
Variable Costs
GROSS MARGIN
Enterprise Income
Output/Input Ratio
£1,596
£161
£1,758
£95
£287
£175
£25
£582
£1,175
£28,158
3.0
2012-13
All
68
34.7
6.5
227
£198
£832
£1,287
£116
£1,404
£104
£269
£165
£33
£572
£832
£28,891
2.5
Low Performers High Performers
17
14
49.3
27.5
5.0
9.4
247
258
£193
£167
£472
£1,233
£951
£79
£1,030
£108
£257
£139
£53
£557
£472
£23,280
1.8
£1,563
£171
£1,734
£88
£239
£149
£24
£500
£1,233
£33,954
3.5
2013-14
All
57
33.4
7.4
248
£169
£817
Low Performers
15
30.3
5.3
161
£167
£385
£1,249
£112
£1,361
£105
£268
£150
£20
£544
£817
£27,253
2.5
£883
£59
£942
£112
£280
£147
£18
£557
£385
£11,673
1.7
Average winter wheat gross margins fell by two per cent compared to 2012-13.
Although yields increased significantly, slightly less area was cultivated (down four per
cent) and prices fell by around 15% to an average of £169/t. As a result total output
value fell by three per cent. However, reduced costs countered this with the high
performing group doing so by 14%. These units increased their enterprise gross
margin by five per cent and the overall income by 21%. Therefore, higher yields and
better cost control (seeds, fertiliser and sprays) offset the fall in prices.
The tables below provide an indication of the on year change and the divergence in
performance between the high and low groups.
Chart 5 Winter Wheat
Page | 11
Table 8 Winter Barley
Winter Barley
Enterprise Margin Performance Data
Per Hectare
Summary Data 2013/14
Number of Enterprises
Area (ha)
Yield (t/ha)
Production (t)
Price (£/t)
Gross Margin (£/ha)
Value of Crop Output
Value of Straw Sold
Total Output Value
Seeds
Fertiliser
Crop Chemicals
Sundry Expenses
Variable Costs
GROSS MARGIN
Enterprise Income
Output/Input Ratio
c: removed due to low sample size.
High Performers
c
c
c
c
c
c
c
c
c
c
c
c
c
c
c
c
c
2012-13
All
17
27.8
6.4
177
£165
£699
£1,046
£152
£1,198
£87
£254
£125
£33
-£499
£699
£19,396
2.4
Low Performers High Performers
c
c
c
c
c
c
c
c
c
c
c
c
c
c
c
c
c
c
c
c
c
c
c
c
c
c
c
c
c
c
c
c
c
c
2013-14
All
16
28.4
5.6
159
£143
£443
Low Performers
c
c
c
c
c
c
£800
£135
£935
£105
£250
£120
£18
£492
£443
£12,591
1.9
c
c
c
c
c
c
c
c
c
c
c
Average winter barley gross margins fell significantly (down 37%) to £443/ha. Yields
were down by 12% from 2012-13 as was the price per tonne, down 13%. Although the
area under cultivation increased by two per cent, overall production fell by 10% to 159
tonnes. As a result, output value was down on the year at £935/ha (22%) compared to
£1,198/ha in 2012-13. Spending on seeds increased by 20% to £105/ha with low
performers increasing their spend further. Fertiliser and crop chemical spending fell
slightly, meaning that overall variable costs fell by one per cent to £492/ha. The
reduced gross margins were due to lower yields and prices compared to 2012-13.
Chart 6 Winter Barley
Page | 12
Table 9 Spring Barley
Spring Barley
Enterprise Margin Performance Data
Per Hectare
Summary Data 2013/14
Number of Enterprises
Area (ha)
Yield (t/ha)
Production (t)
Price (£/t)
Gross Margin (£/ha)
High Performers
49
59.8
6.0
361
£195
£962
Value of Crop Output
Value of Straw Sold
Total Output Value
Seeds
Fertiliser
Crop Chemicals
Sundry Expenses
Variable Costs
GROSS MARGIN
Enterprise Income
Output/Input Ratio
£1,176
£169
£1,344
£90
£180
£79
£33
-£382
£962
£57,517
3.5
2012-13
All
Low Performers
195
48
49.3
44.7
5.0
4.1
245
181
£189
£182
£686
£408
£937
£133
£1,070
£90
£184
£76
£34
-£384
£686
£33,799
2.8
£726
£96
£822
£96
£202
£80
£35
-£415
£408
£18,217
2.0
High Performers
45
62.3
6.6
412
£156
£834
£1,024
£188
£1,212
£96
£172
£82
£27
£377
£834
£51,955
3.2
2013-14
All
177
50.5
5.6
284
£147
£574
Low Performers
44
37.8
4.5
171
£139
£313
£825
£142
£968
£93
£182
£81
£37
£394
£574
£28,966
2.5
£628
£100
£728
£96
£197
£84
£39
£416
£313
£11,828
1.8
The average spring barley gross margin fell by 16% in 2013-14 to £574/ha with the
other performance groups also declining. Unlike winter barley, however, spring barley
yields were higher in 2013-14, up 13% on average. The average area under
cultivation also increased by two per cent to 51 hectares. This resulted in a higher
production figure of 284 tonnes (up 16%). However, like other cereals, the price per
tonne fell markedly, in this case, by 22% to £147/t. Output value per hectare was
pushed down by -10% to £968/ha. Spring barley enterprise seed and spray costs
increased while fertiliser spends decreased slightly. Average variable costs were up
by two per cent while the top performers managed a one per cent reduction to
£377/ha, a £16 per hectare cost advantage on the average.
Chart 7 Spring Barley
Page | 13
Table 10 Mixed Barley
Mixed Barley
Enterprise Margin Performance Data
Per Hectare
Summary Data 2013/14
Number of Enterprises
Area (ha)
Yield (t/ha)
Production (t)
Price (£/t)
Gross Margin (£/ha)
High Performers
8
61.3
6.5
399
£184
£937
Value of Crop Output
Value of Straw Sold
Total Output Value
Seeds
Fertiliser
Crop Chemicals
Sundry Expenses
Variable Costs
GROSS MARGIN
Enterprise Income
Output/Input Ratio
£1,192
£178
£1,371
£84
£206
£116
£28
£434
£937
£57,421
3.2
2012-13
All
33
75.5
5.3
400
£188
£702
Low Performers
9
55.2
4.3
236
£186
£480
High Performers
7
73.5
6.7
494
£152
£822
£992
£128
£1,120
£79
£201
£110
£27
£417
£702
£53,034
2.7
£792
£129
£920
£79
£210
£121
£29
£440
£480
£26,516
2.1
£1,021
£184
£1,205
£83
£171
£107
£22
£383
£822
£60,400
3.1
2013-14
All
31
85.7
6.0
517
£148
£608
Low Performers
8
89.1
5.1
454
£142
£419
£890
£128
£1,018
£89
£193
£98
£29
£410
£608
£52,095
2.5
£722
£122
£845
£91
£203
£102
£29
£425
£419
£37,361
2.0
Again, as with the other types of cereals, a fall in gross margins is observed. The
average for mixed barley enterprises gross margins is down 13% from 2012-13. The
other performance groups are similar. Yields improved to six t/ha, an increase of 14%,
however, as above, the price received per tonne fell by 21% to £148/t. Area cropped
was up for all groups and by 14% for the overall average. This meant that production
went up to an average 517 tonnes per enterprise, an increase of 29%. However, due
to the fall in prices, output value per hectare fell by nine per cent to £1,018 per hectare
compared to 2012-13. While spending on seeds increased by 12%, it was reduced for
fertilisers and crop chemicals. Overall variable costs were two per cent lower than the
previous year. The high performers did however, raise their overall enterprise income
by five per cent on the back of increased production.
Chart 8 Mixed Barley
Page | 14
Table 11 Winter Oil Seed Rape
Winter Oil Seed Rape
Per Hectare
Summary Data 2013/14
Number of Enterprises
Enterprise Margin Performance Data
Area (ha)
Yield (t/ha)
Production (t)
Price (£/t)
Gross Margin (£/ha)
High Performers
10
29.8
3.6
107
£413
£914
Value of Crop Output
Value of Straw Sold
Total Output Value
Seeds
Fertiliser
Crop Chemicals
Sundry Expenses
Variable Costs
GROSS MARGIN
Enterprise Income
Output/Input Ratio
£1,483
£0
£1,483
£71
£301
£175
£22
£569
£914
£27,266
2.6
2012-13
All
37
30.0
3.0
89
£397
£623
Low Performers
10
31.7
2.2
70
£390
£328
High Performers
7
37.6
4.0
149
£321
£732
£1,186
£4
£1,190
£68
£287
£186
£27
£567
£623
£18,667
2.1
£867
£3
£870
£57
£276
£182
£27
£542
£328
£10,389
1.6
£1,275
£18
£1,292
£85
£296
£154
£25
£560
£732
£27,551
2.3
2013-14
All
30
26.0
3.2
84
£313
£474
Low Performers
8
26.7
2.5
67
£309
£233
£1,006
£5
£1,011
£78
£262
£165
£30
£536
£474
£12,348
1.9
£773
£0
£773
£90
£238
£187
£25
£541
£233
£6,219
1.4
Gross margins for winter oil seed rape enterprises decreased by 24% to £474/ha
compared to 2012-13. This was reflected in the other performance groups. Average
yields were up by eight per cent to 3.2 t/ha. The average area under cultivation
however fell by 13% to 26 hectares, the top performers planting 26% more area than
in 2012-13. This was mirrored in the overall production data, with the top group
increasing their output by 39% to 149 tonnes. The other groupings fell by five per cent.
Again, the prices received by farmers were significantly down from the previous year,
in this case by 21% to £313/t. Because of this, output value was 15% less at £1,011
per hectare. Seed costs again increased, this time by 15%. Fertilisers and sprays
were down eight per cent and 11% respectively. Sundry crop expenses were up 14%.
Total variable costs were five per cent lower than in 2012-13. Only the top performers
increased their enterprise income, but only slightly, by one per cent.
Chart 9 Winter Oil Seed Rape
Page | 15
Table 12 Spring Oats
Spring Oats
Enterprise Margin Performance Data
Per Hectare
Summary Data 2013/14
Number of Enterprises
Area (ha)
Yield (t/ha)
Production (t)
Price (£/t)
Gross Margin (£/ha)
High Performers
6
16.0
6.2
99
£207
£1,091
Value of Crop Output
Value of Straw Sold
Total Output Value
Seeds
Fertiliser
Crop Chemicals
Sundry Expenses
Variable Costs
GROSS MARGIN
Enterprise Income
Output/Input Ratio
£1,277
£145
£1,423
£93
£167
£47
£24
£331
£1,091
£17,428
4.3
2012-13
All
27
27.6
4.8
132
£194
£747
Low Performers
7
20.6
4.1
85
£182
£501
High Performers
8
20.9
5.9
124
£178
£921
£924
£126
£1,049
£98
£140
£43
£22
£303
£747
£20,598
3.5
£743
£79
£822
£87
£165
£48
£21
£321
£501
£10,301
2.6
£1,039
£151
£1,189
£105
£100
£43
£22
£269
£921
£19,221
4.4
2013-14
All
32
27.3
5.4
146
£141
£495
Low Performers
9
40.8
4.8
195
£123
£222
£755
£114
£869
£103
£165
£70
£36
£374
£495
£13,524
2.3
£593
£67
£660
£113
£181
£85
£60
£438
£222
£9,051
1.5
Gross margins for spring oat enterprises fell substantially in Scotland during 2013-14.
The average gross margin fell by 34% to £495/ha compared to 2012-13. The lower
performance group gross margin fell by more than half, even though the area
cultivated almost doubled and yields increased by 16% to 4.8 tonnes per hectare.
Average yields were up 12% and production 11%. However, it can be seen that
overall average prices are 27% down on the year at £141/t and output value 17% less
at £869/ha. Overall spring oat average enterprise costs increased 24% with the spend
on fertilisers up 18% and sprays by 64% to £70/ha. However, the top performers
reduced their costs by 19% while increasing production by a quarter. Even though the
gross margin fell for the top group they still managed to increase their enterprise
income by 10% to £19,221.
Chart 10 Spring Oats
Page | 16
Table 13 Winter Oats and All Potatoes (combined)
Winter Oats
Enterprise Margin Performance Data
All Potatoes (combined) - Ware, Seed and Mixed
Per Hectare
2012-13
2013-14
Summary Data 2013/14
Winter Oats Potatoes
Winter Oats
Potatoes
Number of Enterprises
5
7
5
11
Area (ha)
19.4
31.8
16.6
25.1
Yield (t/ha)
5.9
36.2
5.8
38.9
Production (t)
114.3
1154
96.3
978
Price (£/t)
£194
£179
£146
£167
Gross Margin (£/ha)
£839
£4,917
£569
£4,299
Value of Crop Output
Value of Straw Sold
Total Output Value
Seeds
Fertiliser
Crop Chemicals
Sundry Expenses
Variable Costs
GROSS MARGIN
Enterprise Income
Output/Input Ratio
£1,131
£54
£1,185
£88
£186
£57
£14
£346
£839
£16,255
3.4
£6,742
£0
£6,742
£561
£463
£594
£208
£1,826
£4,917
£156,501
3.7
£847
£127
£974
£110
£181
£68
£46
£405
£569
£9,429
2.4
£6,167
£0
£6,167
£708
£476
£476
£208
£1,868
£4,299
£108,039
3.3
Due to the small number of enterprises the commentary is limited. Winter oat gross
margins were significantly down (-32%) from the previous year. There was less area
planted, poorer yields and lower production (-16%). The price per tonne was again
down, this time by -25% to £146/t. Overall output was unsurprisingly -18% lower at
£974 per hectare. Seed costs were up by a quarter while spending on fertiliser fell
slightly. Overall, variable costs were up 17% on the year and combined with lower
output values enterprise income fell by a third.
Chart 11 Winter Oats
Page | 17
All Potatoes (combined) - Ware, Seed and Mixed
Potato enterprises were merged to allow basic analysis of the data. Potato margins fell
in 2013-14 by 13%. While average yields increased by seven per cent, area cultivated
was 21% lower and overall production was reduced by 15%. The price received by
farmers, in the sample, contracted by seven per cent to £167/t. Like cereal
enterprises, seed costs were up 26% to £708/ha, fertilisers spending increased
slightly, while sprays and other crop treatments costs were 20% less than in 2012/13.
Overall, variable cost were up two per cent. Overall enterprise income was 13% lower
than 2012/13 at £108,039.
Chart 12 All Potatoes (combined) - Ware, Seed and Mixed
Page | 18
Dairy and Beef Summary
Dairy Results
It should be noted that the data in this analysis relates to the 2013-14 production
period. Average gross margins for dairy enterprises ranged from £326 per head for
dairy followers to £1,108 for dairy cow enterprises (equivalent to 15.4 ppl). The
average gross margin for related mixed dairy and beef enterprises was £396 per
head.
Where sample sizes are sufficient, comparisons can be made between the
performance groups. Low performing combined dairy mixed and dairy beef enterprise
margins are significantly lower than the high performers with low performers making
£139 per head, while the top performers are returning £641 per head. The spread is
much less for dairy cow enterprises ranging from £751 per head to £1,538 per head
for the top performers. Previously, in 2012-13, high performing dairy cow enterprises
made twice the average gross margin, in this period it is one and a half times the
value.
On dairy cow enterprises, the differences in financial performance were; higher price
per litre, lower herd size, higher yield per cow, better technical performance, higher
prices for livestock sales and lower costs at 13.91 ppl for the top performers which
compares to 15.92 ppl for the lower group.
Dairy follower enterprises output value was similar between the groupings however,
high performers added more value per head between opening and closing valuations
than the others, and more importantly, managed their costs more effectively as these
were substantially lower than the other groups.
With mixed dairy and beef herds the top performers had higher output values and
lower costs than the average performers.
Chart 13 Average gross Margin per head 2013-14
Page | 19
The chart above shows how the average gross margin for dairy enterprises was
higher than beef enterprises.
Chart 14 Average gross margins between 2012-13 and 2013-14
From the chart above it can be seen that, with the exception of dairy followers and
beef forward stores, dairy and beef enterprises increased their gross margins on the
previous year.
Chart 15 Output:Input Ratios 2013-14
Dairy and Beef
Output:Input Ratio
3.0
2.5
2.0
1.5
1.0
High
0.5
Average
0.0
Low
Enterprise Type
Above, the value of ratio greater than one indicates output value is greater than the
cost of inputs. Dairy followers, beef upland sucker herds (12 months) and beef mixed
herds had low performing output:input ratios close to one. Low performing beef
finishing enterprises were 0.9. It can be seen that, in many cases, the high performing
enterprises are creating twice the value from the inputs consumed than their low
performing counterparts.
Page | 20
Chart 16 Dairy and Beef Enterprise Income 2013-14
Enterprise income here is based on the herd size multiplied by the gross margin for
the cattle enterprise type. The greater returns for the high performing dairy cattle
based enterprises can be seen. Beef enterprise income is not exceeding £50,000
before fixed costs are taken into account and some, like beef finishing, are recording
losses before additional costs are taken into account.
Page | 21
Dairy Cows
It is important to note that the analysis presented here is for the 2013-14 production
year. The price per litre for milk, which dairy farmers are receiving in 2014-15, has
fallen significantly. Percentage change is calculated on a per head basis with pence
per litre shown in brackets.
The performance of dairy enterprises improved during 2013-14 when compared to the
previous year. Average gross margins increased by 30% to £1,108/head (15.4ppl).
Average herd size is 173 dairy cows which is a two per cent increase on the year
before. Yield per cow increased across all groups. The average yield was 7,185 litres
per cow, this was an increase of three per cent compared to 2012-13. It is worth
noting that the high performers are producing 15% more yield per cow than the
average and 31% more than the lower performance group. The average price dairy
farmers in the survey received for their milk was 31.46 ppl which was 13% higher than
in 2012-13. Overall output value rose by 16% on average to £2,200/head (30.28ppl).
Comparing the 2013-14 performance groups the high performers are producing 19%
more output than the average at £2,625/head, with the low performance group 17%
lower than the average output value at £1,821/head. It would appear that the high
performers are not just increasing yields but also adding more value to the livestock
sold; the high performers livestock sold value is £426 per head which is higher that of
the low performers at £243 per head. These farmers are increasing value by improved
technical performance managing their herd better with lower cost of replacements.
Per head costs for high performing enterprises were reduced by six per cent while the
average/low farms costs increased by five per cent. On a pence per litre basis the
average costs increased by three per cent to 14.88ppl. The inter group comparison
shows that, on a per head basis, costs are similar at £1,090/head. However, on a
pence per litre basis, this is an advantage of around 1ppl. The average enterprise
income increased by 32% to £191,810 per farm.
Although the relationships between herd size, yield per cow, technical performance
and the dairying system used is complex additional information can be revealed by
charting the data and using the line of best fit.
Chart 17 Dairy Cows: Comparison of Yield per Cow (litres) by Gross Margin PPL
R2= 0.02
Page | 22
The best fit line describes the relationship between the two variables. In this case, for
yield and gross margin (ppl), the links are weak, with only 2% of the relationship
being explained.
Chart 18 Dairy Cows: Yield per Cow (litres) by Average Variable Costs
R2 = 0.17
The relationship between total variable costs and yields is better. In this case the best
fit only explains 17% of the variation but it indicates that as yields increase so do
costs.
Chart 19 Dairy Cows: Herd Size by Average Variable Costs
R2= 0
It appears that variable costs are less connected to variations in herd size than the link
to changes in milk yields. It is counterproductive to increase milk yields (in response to
falling prices) beyond the point where additional costs outweigh any extra income.
However, the principle variable which has an impact on the gross margin is the price
per litre of milk received by dairy farmers as the chart below indicates.
Page | 23
Chart 20 Dairy Cows: Price per Litre by Gross Margin PPL
The best fit line indicates that the milk price explained 34% of the variation in gross
margin.
R2 = 0.34
Dairy farmers will find it difficult to adjust to falling prices and higher yields may not be
the answer. Adjusting herd size to increase overall enterprise income may be
beneficial but the conclusion is that controlling inputs and lowering the cost of
production, by improvements to technical performance, will be more realistic.
Chart 21 Dairy Cows
Page | 24
There is no difference to the general trends when the data is based on a pence per
litre basis.
Chart 22 Average Output, Input and Gross Margin on Pence per Litre Basis
All performance groups have broadly a similar spending distribution on variable costs
regardless of price, yield, herd size and gross margin.
Chart 23 Percentage Spend on Variable Costs by Performance Group
Page | 25
Table 14 Dairy Table
Dairy Cows
Enterprise Margin performance Data
Per Head & PPL
Summary Data 2012/13
Number of Enterprises
Herd Size
Yield per cow
Gross Margin per litre (ppl)
Gross Margin per head (£/hd)
Milk sold
Milk used on farm
Livestock sales
Total sales
Closing valuation
Total purchases
Opening valuation
Blsa
Output Value
homegrown concentrates
purchased concentrates
roughages
homegrown straw
keep taken
vet & med
Sundry Livestock expenses
Forage Costs
Variable Costs
GROSS MARGIN
Enterprise Income
Output/Input Ratio per head
Page | 26
High Performers
11
197
7,915
15.35
£1,222
ppl
£/head
29.39
£2,387
0.27
£21
3.92
£318
33.27
£2,725
14.56
£1,171
4.93
£409
13.24
£1,074
0.53
£41
29.14
£2,373
0.43
8.71
0.72
0.06
0.02
0.73
1.51
1.59
-13.79
15.35
£33
£736
£61
£5
£2
£61
£125
£128
-£1,151
£1,222
£240,430
2.1
2012-13
All
42
171
6,991
12.1
£850
ppl
£/head
28.32
£1,998
0.31
£20
4.14
£293
32.43
£2,311
15.95
£1,085
6.11
£429
15.24
£1,043
0.45
£29
26.58
£1,895
0.45
8.76
1.01
0.06
0.06
0.77
1.66
1.7
-14.48
12.1
£30
£638
£74
£5
£4
£58
£120
£118
-£1,046
£850
£144,927
1.8
Low Performers
10
200
5,887
8.87
£480
ppl
£/head
27.76
£1,642
0.42
£23
4.26
£253
31.98
£1,918
19.97
£1,120
7.95
£468
18.65
£1,058
0.36
£19
24.98
£1,493
0.33
10.14
1.41
0.01
0.07
0.83
1.64
1.68
-16.11
8.87
£16
£643
£93
£0
£3
£55
£106
£97
-£1,013
£480
£96,066
1.5
High Performers
10
149
8,298
19.75
£1,538
ppl
£/head
33.81
£2,610
0.42
£30
6.02
£426
39.74
£3,066
12.85
£1,013
4.93
£386
13.72
£1,049
0.27
£21
33.66
£2,624
0.52
8.57
1.11
0.04
0.06
0.64
1.71
1.27
13.91
19.75
£39
£670
£86
£3
£5
£50
£131
£102
£1,085
£1,538
£229,344
2.4
2013-14
All
41
173
7,185
15.4
£1,108
ppl
£/head
31.46
£2,266
0.32
£22
4.46
£313
35.9
£2,601
15.94
£1,124
5.93
£425
15.08
£1,060
0.55
£41
30.28
£2,200
0.49
9.01
1.11
0.06
0.12
0.74
1.71
1.64
14.88
15.4
£34
£666
£82
£5
£8
£56
£125
£117
£1,093
£1,108
£191,810
2.0
Low Performers
11
204
6,344
12.05
£751
ppl
£/head
29.81
£1,922
0.39
£25
3.89
£243
33.72
£2,189
17.92
£1,133
6.38
£410
16.62
£1,045
0.68
£47
27.96
£1,821
0.31
9.54
1.5
0.07
0.26
0.72
1.64
1.89
15.92
12.05
£17
£653
£100
£3
£16
£52
£111
£117
£1,069
£751
£153,363
1.7
Table 15 Dairy Followers
Dairy Followers
Enterprise Margin Performance Data
Per Head
2012-13
Summary Data
Number of Enterprises
Herd size
Total sales
Closing valuation
Total purchases
Opening valuation
Blsa
Total Output Value
Homegrown concentrates
Purchased concentrates
Roughages
Homegrown straw
Keep taken
Vet & med
Sundry Livestock expenses
Forage Costs
VARIABLE COSTS
GROSS MARGIN
Enterprise Income
Output/Input Ratio
High Performers
c
c
c
£/head
c
c
c
c
c
All
13
87
£1,152
£/head
£1,564
£235
£1,351
£0
£1,129
c
c
c
c
c
c
c
c
c
c
c
c
£22
£305
£51
£2
£23
£49
£92
£108
£652
£477
£41,535
1.7
2013-14
Low Performers High Performers
c
c
c
c
c
c
£/head
£/head
c
c
c
c
c
c
c
c
c
c
c
c
c
c
c
c
c
c
c
c
c
c
c
c
c
c
c
c
c
c
c
c
c
c
c
All
18
88
£1,298
£/head
£1,695
£243
£1,610
£0
£1,141
£10
£363
£95
£1
£55
£51
£122
£118
£815
£326
£28,803
1.4
Low Performers
c
c
c
£/head
c
c
c
c
c
c
c
c
c
c
c
c
c
c
c
c
c
c
c: removed due to low sample size.
Dairy follower average gross margins fell substantially in 2013-14. Average herd size
increased by around two per cent with the sales price up 13% to £1,298/head.
However, total output value remained steady due to the increased cost of purchases.
Average performers added 62% of value between the valuations and final sales.
Gross margins fell due to a large rise in costs. Specifically, the cost of purchased
concentrates increased by 19% as the value of the home grown equivalent collapsed
by more than half to £10/head. Also, the cost of roughages increased 85% to an
average of £95/head, adding to the feed bill. Total variable costs rose 25% to
£815/head reducing the gross margin by 32% to £326.
Chart 24 Dairy Followers
Page | 27
Table 16 Dairy Mixed and Dairy Beef (combined)
Dairy Mixed & Dairy Beef (combined)
Per Head
Summary Data
Number of Enterprises
2012-13
Herd size
Total sales
Closing valuation
Total purchases
Opening valuation
Blsa
Total Output Value
Homegrown concentrates
Purchased concentrates
Roughages
Homegrown straw
Keep taken
Vet & med
Sundry Livestock expenses
Forage Costs
VARIABLE COSTS
GROSS MARGIN
Enterprise Income
Output/Input Ratio
Enterprise Margin Performance Data
High Performers
6
117
£1,272
£/head
£1,524
£192
£1,367
£0
£1,238
All
26
119
£1,155
£/head
£1,208
£210
£1,187
£0
£966
£43
£239
£30
£16
£17
£51
£65
£112
£572
£666
£77,781
2.2
£37
£255
£54
£8
£16
£42
£63
£119
£595
£371
£43,980
1.6
Low Performers High Performers
6
6
120
121
£1,059
£1,058
£/head
£/head
£1,109
£1,372
£288
£255
£1,146
£1,089
£0
£0
£735
£1,086
£14
£283
£65
£0
£5
£47
£59
£122
£595
£140
£16,769
1.2
£36
£217
£24
£6
£6
£22
£46
£87
£445
£641
£77,648
2.4
2013-14
All
23
117
£973
£/head
£1,208
£194
£1,080
£0
£907
Low Performers
5
111
£779
£/head
£992
£192
£983
£0
£596
£23
£225
£44
£8
£10
£34
£68
£100
£511
£396
£46,403
1.8
£28
£162
£63
£7
£1
£30
£78
£89
£458
£139
£15,433
1.3
Average margins for mixed dairy and beef enterprises increased seven per cent in
2013-14 to £396/head. However, top and bottom performance groups fell back
slightly. Average herd size was constant, but sales values for farmers decreased by
16% on the year to £973/head. There was some disparity across the groups in relation
to valuations and purchases. Only the top performers increased their purchases
compared to the previous year (up 33%) while the others reduced their spending. Top
performers added nearly 81% of value between opening and closing valuations and
final sales and this compares to 51% added for the low performers. Overall farmers
have spent less on costs with total average variable costs down to £511/head, a fall of
14% on the year. However, gross margins for both top and bottom performers fell, as
the fall in output value outweighed the drop in costs. Average overall enterprise
income was up six per cent and for every £ spent on inputs top performers are
producing almost double the output of the low performers.
Chart 25 Dairy Mixed and Dairy Beef (combined)
Page | 28
Table 17 Beef: Hill Herds
Beef: Hill Herds
Enterprise Margin Performance Data
Per Head
Summary Data
Number of Enterprises
2012-13
Herd size
Total sales
Closing valuation
Total purchases
Opening valuation
Blsa
Total Output Value
Homegrown concentrates
Purchased concentrates
Roughages
Homegrown straw
Keep taken
Vet & med
Sundry Livestock expenses
Forage Costs
VARIABLE COSTS
GROSS MARGIN
Enterprise Income
Output/Input Ratio
High Performers
c
c
c
£/head
c
c
c
c
c
All
18
50
£726
£/head
£1,401
£101
£1,366
£43
£617
c
c
c
c
c
c
c
c
c
c
c
c
£6
£185
£84
£5
£22
£40
£69
£48
£459
£158
£7,920
1.3
Low Performers High Performers
c
c
c
c
c
c
£/head
£/head
c
c
c
c
c
c
c
c
c
c
c
c
c
c
c
c
c
c
c
c
c
c
c
c
c
c
c
c
c
c
c
c
c
c
c
2013-14
All
15
45
£775
£/head
£1,422
£48
£1,412
£32
£706
£2
£234
£121
£6
£19
£42
£67
£47
£537
£169
£7,571
1.3
Low Performers
c
c
c
£/head
c
c
c
c
c
c
c
c
c
c
c
c
c
c
c
c
c
c
c: removed due to low sample size.
Average gross margins for beef hill herds rose seven per cent in 2013-14 to
£169/head. Herd sizes are small and they contracted further falling by around -10% to
an average of 45 cattle per enterprise. Average sales price increased by seven per
cent to £775/head. In relative terms, average performers added 48% of value between
the valuations and final sales. Output value was, on average up 14% on the year at
£706/head. Again, the increase in the cost of purchased concentrates (27%), in
combination with a reduction in the home grown equivalent, plus a 43% rise in the cost
of roughages, resulted in a 17% rise in overall variable cost to £537/head. Enterprise
income fell by four per cent to an average of £7,571.
Chart 26 Beef: Hill Herds
Page | 29
Table 18 Beef: Upland suckler/herds selling calves as yearling stores (at 12
months)
Beef: Upland suckler/herds selling calves as yearling stores (c.12 months)
Per Head
Summary Data
Number of Enterprises
2012-13
Herd size
Total sales
Closing valuation
Total purchases
Opening valuation
Blsa
Total Output Value
Homegrown concentrates
Purchased concentrates
Roughages
Homegrown straw
Keep taken
Vet & med
Sundry Livestock expenses
Forage Costs
VARIABLE COSTS
GROSS MARGIN
Enterprise Income
Output/Input Ratio
Enterprise Margin Performance Data
High Performers
33
118
£890
£/head
£1,566
£90
£1,437
£48
£880
All
130
95
£825
£/head
£1,561
£106
£1,502
£39
£740
£38
£120
£37
£13
£12
£36
£46
£107
£409
£471
£55,779
2.2
£48
£145
£48
£20
£13
£42
£54
£110
£479
£260
£24,756
1.5
2013-14
Low Performers High Performers
33
32
76
89
£775
£1,002
£/head
£/head
£1,475
£1,850
£119
£138
£1,497
£1,673
£27
£35
£607
£1,010
£65
£188
£67
£29
£9
£46
£52
£117
£574
£33
£2,502
1.1
£40
£121
£43
£17
£4
£50
£59
£117
£450
£560
£49,826
2.2
All
131
87
£911
£/head
£1,639
£127
£1,617
£31
£775
Low Performers
32
70
£839
£/head
£1,542
£151
£1,627
£28
£575
£38
£142
£55
£19
£16
£45
£58
£118
£491
£284
£24,625
1.6
£26
£203
£73
£16
£20
£43
£60
£115
£557
£18
£1,273
1.0
Average herd size decreased nine per cent from the previous year. The top and
average beef upland suckler performers increased their gross margin in 2013-14 by
19% (£560/head) and nine per cent (£284/head) respectively. The gross margin for
the low group fell markedly by 45%, to £18/head. The top performers are adding 55%
of value between the valuations and final sales, compared to 44% for the average and
32% for the lowest performers. On the year, top performers increased their output
value by 15%, the average by five per cent and the low performers fell by the same
amount. The top output value is around 75% higher than that of the low group. Costs
were higher for both the top and average groups with roughages and forage costs
increasing, while concentrates were lower.
Chart 27 Beef: Upland suckler/herds selling calves as yearling stores (at 12 months)
Page | 30
Table 19 Beef: Lowland Suckler/Herds
Beef: Lowland suckler/herds
Enterprise Margin Performance Data
Per Head
Summary Data
Number of Enterprises
2012-13
Herd size
Total sales
Closing valuation
Total purchases
Opening valuation
Blsa
Total Output Value
Homegrown concentrates
Purchased concentrates
Roughages
Homegrown straw
Keep taken
Vet & med
Sundry Livestock expenses
Forage Costs
VARIABLE COSTS
GROSS MARGIN
Enterprise Income
Output/Input Ratio
High Performers
9
69
£1,033
£/head
£1,962
£139
£1,860
£72
£924
All
38
69
£890
£/head
£1,666
£136
£1,637
£35
£747
£83
£87
£30
£43
£8
£45
£31
£138
£466
£458
£31,413
2.0
£77
£97
£37
£56
£12
£47
£36
£128
£489
£259
£17,747
1.5
2013-14
Low Performers High Performers
9
8
57
58
£786
£926
£/head
£/head
£1,538
£2,052
£265
£113
£1,499
£1,768
£16
£32
£544
£1,065
£119
£85
£36
£58
£14
£54
£46
£118
£529
£15
£848
1.0
£70
£83
£41
£64
£18
£62
£44
£172
£554
£511
£29,751
1.9
All
30
63
£966
£/head
£1,981
£237
£1,838
£14
£859
Low Performers
8
65
£803
£/head
£1,734
£330
£1,555
£7
£645
£67
£117
£36
£58
£22
£57
£43
£172
£571
£288
£18,263
1.5
£36
£177
£24
£39
£33
£64
£53
£148
£574
£70
£4,575
1.1
Average gross margins increased by 11% to £288/head. Herd size fell by eight per
cent, while the sales price rose by nine per cent to £966/head. All groups increased
output by around 15%, the top performers output valued at £1,065/head and the low
group at £645/head. Between the valuations and final sales top performers added
57% of value, the average 41% and the low performers 34%. The top performers are
spending less on cattle purchases at £113/head while adding over £100/head more in
final value. Spending on home grown concentrates fell 12% while purchased
concentrates increased 20%, top performers spent less at £83/head compared to the
average at £177/head. Forage costs increased by 25-35% to £172/head. Overall costs
increased by an average of 11% but output value was greater, resulting in higher
margins. Smaller herd sizes meant that overall income was only three per cent higher
while top performer’s income fell by five per cent. Before costs, low performers were
returning £1.34 for every £1 spent, after costs this fell to £1.10.
Chart 28 Beef: Lowland Suckler/Herds
Page | 31
Table 20 Beef: Mixed Herds
Beef: Mixed
Enterprise Margin Performance Data
Per Head
Summary Data
Number of Enterprises
2012-13
Herd size
Total sales
Closing valuation
Total purchases
Opening valuation
Blsa
Total Output Value
High Performers
5
71
£1,181
£/head
£790
£647
£697
£0
£627
All
23
60
£1,073
£/head
£522
£646
£512
£0
£439
£80
£83
£20
£11
£4
£9
£26
£53
£288
£339
£24,010
2.2
£84
£90
£14
£12
£2
£13
£31
£51
£297
£142
£8,524
1.5
Homegrown concentrates
Purchased concentrates
Roughages
Homegrown straw
Keep taken
Vet & med
Sundry Livestock expenses
Forage Costs
VARIABLE COSTS
GROSS MARGIN
Enterprise Income
Output/Input Ratio
2013-14
Low Performers High Performers
6
6
43
45
£1,085
£1,415
£/head
£/head
£525
£843
£644
£675
£631
£837
£0
£0
£335
£746
£144
£158
£11
£18
£2
£10
£25
£43
£412
-£77
-£3,303
0.8
£81
£66
£12
£25
£6
£12
£30
£86
£317
£429
£19,159
2.4
All
21
58
£1,262
£/head
£608
£680
£675
£0
£515
Low Performers
6
51
£1,415
£/head
£507
£673
£872
£0
£376
£77
£83
£18
£19
£5
£14
£29
£68
£312
£202
£11,791
1.6
£97
£141
£22
£9
£3
£14
£37
£57
£380
-£4
-£204
1.0
Gross margins increased for the top and average performance groups by 26%
(£429/head) and 43% (£202/head) respectively. Low performers improved but still
made a loss of £4/head compared to a loss of £77/head in 2012-13. Average herd
size was down three per cent at 58 cattle per enterprise. The sale price per head was
higher in 2013-14, up on average by 18% to £1,262/head and opening valuations
were also higher. The top performers added 49% of value between the valuations and
final sales while the average added 38% and the low performers 24%. However, in
absolute terms, low performance groups lost £365/head between opening and closing
valuations during 2013-14. Spending on concentrates fell by eight per cent on the year
while roughages and forage costs increased by approximately 30%. Total average
variable costs went up by five per cent to £312/head. Expenditure on inputs was
higher for the low performers, in this case £63/head more than the top group.
Chart 29 Beef: Mixed Herds
Page | 32
Table 21 Beef: Finishing
Beef: Finishing
Enterprise Margin Performance Data
Per Head
Summary Data
Number of Enterprises
2012-13
Herd size
Total sales
Closing valuation
Total purchases
Opening valuation
Blsa
Total Output Value
Homegrown concentrates
Purchased concentrates
Roughages
Homegrown straw
Keep taken
Vet & med
Sundry Livestock expenses
Forage Costs
VARIABLE COSTS
GROSS MARGIN
Enterprise Income
Output/Input Ratio
High Performers
27
95
£1,395
£/head
£878
£733
£844
£0
£698
All
105
115
£1,284
£/head
£811
£760
£783
£0
£552
£101
£81
£8
£29
£8
£19
£25
£57
£328
£370
£35,297
2.1
£117
£134
£17
£28
£8
£15
£26
£54
£400
£152
£17,372
1.4
2013-14
Low Performers High Performers
26
20
93
96
£1,280
£1,642
£/head
£/head
£796
£1,083
£840
£842
£764
£1,106
£0
£0
£472
£780
£146
£202
£35
£32
£2
£17
£33
£60
£526
-£54
-£5,030
0.9
£95
£83
£24
£29
£9
£15
£25
£83
£362
£418
£40,090
2.2
All
83
113
£1,370
£/head
£944
£822
£878
£0
£614
Low Performers
20
130
£1,183
£/head
£953
£867
£806
£0
£463
£107
£139
£20
£33
£7
£16
£28
£63
£413
£201
£22,775
1.5
£116
£200
£22
£44
£9
£19
£27
£52
£489
-£27
-£3,470
0.9
Beef finishing enterprises achieved a 33% increase in gross margin performance to
£201/head compared to 2012-13. Average prices rose seven per cent to £1,370/head
and output value up by 11% to £614/head. Low performers output fell back by two per
cent due to eight per cent reduction in price per head. The top performers are adding
40% of value between the valuations and final sales with the average at 36% and the
low performers adding 28% over the same period. Top performers are also obtaining
much better prices than the other enterprise groups. Spending on home grown
concentrates was down by nine per cent while purchases went up to £139/head, a rise
of four per cent on the year. Roughages, straw and forage costs all increased by
around 16% to 18%. Average overall costs went up by three per cent on the year to
£413/head. Higher prices, combined with improved added value, outweighed the rise
in costs for top and average performers providing better gross margins. Although low
performers improved on the year, they still made a loss of £27/head mainly due to a
fall in prices.
Chart 30 Beef: Finishing
Page | 33
Table 22 Sheep Results
Sheep: Extensive/Hardhill
Sheep: extensive/hardhill
Enterprise Margin Performance Data
Per Head
Summary Data
Number of Enterprises
2012-13
Flock size
Total sales
Closing valuation
Total purchases
Opening valuation
Blsa
Total Output Value
Homegrown concentrates
Purchased concentrates
Roughages
Homegrown straw
Keep taken
Vet & med
Sundry Livestock expenses
Forage Costs
VARIABLE COSTS
GROSS MARGIN
Enterprise Income
Output/Input Ratio
High Performers
10
798
£68
£/head
£92
£5
£89
£0
£65
All
42
798
£50
£/head
£86
£6
£85
£0
£45
£2
£6
£0
£0
£1
£6
£7
£4
£26
£38
£30,719
2.5
£1
£10
£1
£0
£3
£5
£6
£5
£31
£14
£11,003
1.4
2013-14
Low Performers High Performers
10
8
748
926
£37
£61
£/head
£/head
£79
£89
£8
£4
£78
£87
£8
£1
£30
£58
£3
£14
£3
£1
£3
£5
£5
£7
£41
-£12
-£8,652
0.7
£0
£11
£0
£0
£1
£4
£7
£4
£28
£30
£27,987
2.1
All
35
774
£46
£/head
£82
£4
£86
£1
£37
Low Performers
9
650
£49
£/head
£75
£5
£95
£8
£23
£0
£12
£1
£0
£3
£5
£6
£4
£31
£6
£4,647
1.2
£0
£14
£3
£0
£2
£6
£6
£7
£39
-£15
-£9,909
0.6
Gross margins for extensive/hardhill sheep enterprises fell by 56% in 2013-14 to
£6/head. Flock sizes were three per cent smaller on average although the top
performers had the largest flocks. Sales prices were down ten per cent on the year.
Output value also declined for all enterprises by around 18%. During 2013-14 top
performers added 65% of value between the valuations and final sales, the average
41%, while low performers only returned 15% due in the main to closing valuations
being £20 less than the opening figure and lower comparative sales prices. The value
of purchased concentrates was 17% higher in 2013-14 at £12/head although average
costs were one per cent lower at £31/head. There are large differences in overall
enterprise income with top performers returning an average of £27,987 per flock to a
loss of £9,909 for low performers where costs exceeded output value.
Chart 31 Sheep: Extensive/Hardhill
Page | 34
Table 23 Sheep: Finished/Store Lamb Production
Sheep: Finished/store lamb production
Per Head
Summary Data
Number of Enterprises
2012-13
Flock size
Total sales
Closing valuation
Total purchases
Opening valuation
Blsa
Total Output Value
Homegrown concentrates
Purchased concentrates
Roughages
Homegrown straw
Keep taken
Vet & med
Sundry Livestock expenses
Forage Costs
VARIABLE COSTS
GROSS MARGIN
Enterprise Income
Output/Input Ratio
Enterprise Margin Performance Data
High Performers
31
418
£139
£/head
£115
£17
£115
£1
£121
All
122
526
£104
£/head
£106
£17
£105
£1
£88
£2
£15
£1
£1
£2
£7
£10
£11
£49
£72
£30,213
2.5
£2
£19
£2
£1
£3
£7
£9
£11
£55
£32
£17,071
1.6
2013-14
Low Performers High Performers
31
32
422
309
£87
£148
£/head
£/head
£110
£121
£20
£24
£109
£117
£0
£0
£68
£127
£3
£29
£6
£1
£4
£8
£10
£13
£74
-£6
-£2,562
0.9
£3
£22
£3
£1
£1
£9
£10
£14
£63
£64
£19,663
2.0
All
128
536
£105
£/head
£108
£21
£105
£2
£86
Low Performers
32
407
£83
£/head
£105
£24
£107
£4
£54
£2
£21
£2
£1
£3
£7
£10
£13
£58
£28
£15,000
1.5
£2
£27
£2
£0
£3
£7
£9
£14
£64
-£9
-£3,759
0.9
Gross margins were lower in 2013-14 for all enterprise groups. The average was
£28/head, a fall of 14%. Average flock size increased by two per cent although top
performers flock numbers were 25% lower. Average prices held steady at £105/head
but there is a significant price difference between the top and low performers of
£65/head. Output value increased for top performers by four per cent to £127/head
compared to £54/head for the lower group. The top performers are adding 89% of
value between the valuations and final sales while the bottom group only added 42%
over the same period. Both home grown and purchased concentrates cost more for
the top and average performers, as did forage costs. However, low performers
reduced costs by 14% on the year but at £64/head it was still higher than the output
value of £54/head. This resulted in an average overall enterprise loss of £3,759 per
flock. Top performers enterprise income was £19,663 turning every £1 of inputs into
£2 of output while low performers turned every £1 of inputs into £0.90 of output.
Chart 32 Sheep: Finished/Store Lamb Production
Page | 35
Table 24 Sheep: Lowland (non-LFA)
Sheep: Lowland (non LFA)
Enterprise Margin Performance Data
Per Head
Summary Data
Flock size
2012-13
Flock size
Total sales
Closing valuation
Total purchases
Opening valuation
Blsa
Total Output Value
Homegrown concentrates
Purchased concentrates
Roughages
Homegrown straw
Keep taken
Vet & med
Sundry Livestock expenses
Forage Costs
VARIABLE COSTS
GROSS MARGIN
Enterprise Income
Output/Input Ratio
High Performers
10
181
£175
£/head
£142
£26
£129
-£1
£163
All
41
294
£135
£/head
£144
£29
£141
-£2
£111
£3
£44
£4
£2
£0
£14
£9
£14
£89
£74
£13,396
1.8
£6
£28
£2
£4
£4
£10
£12
£19
£85
£26
£7,640
1.3
2013-14
Low Performers High Performers
11
9
172
215
£126
£150
£/head
£/head
£213
£104
£57
£25
£185
£109
£1
£0
£97
£119
£16
£34
£2
£7
£6
£9
£16
£32
£120
-£24
-£4,070
0.8
£4
£17
£1
£3
£4
£5
£11
£10
£54
£64
£13,806
2.2
All
34
200
£128
£/head
£147
£24
£152
£0
£99
Low Performers
9
86
£105
£/head
£228
£42
£221
£4
£66
£5
£23
£1
£4
£4
£9
£15
£19
£80
£19
£3,773
1.2
£7
£28
£0
£5
£4
£13
£24
£27
£108
-£42
-£3,609
0.6
Gross margins decreased for all groups in 2013-14. Average margins contracted by
27% to £19/head while top performers were down 13% to £64/head. Flock size rose
for the top group to 215 sheep (up 19%) but fell for the average group to 200 sheep
(down 20%) Prices fell by 14% for the top performers and by five per cent for the
average. Output value was lower compared to 2013-14 with top performers at
£119/head (down -27%) and the average at £99/head (down -£11). While top
performers are adding 88% to value between the valuations and final sales, the
bottom group are only adding 25%. Spending on inputs fell by an average of five
per cent to £80/head. However, this was insufficient to counteract the decline in value
with average gross margins falling 27% and the top group by 13%. Nevertheless, top
performers were converting every £1 of inputs into £2.20 of output while the low
performers are turning £1 of inputs into a loss of £0.60. Increasing the number of
sheep in the flock allowed top performers to marginally increase their overall
enterprise income by three per cent to £13,806 per flock.
Chart 33 Sheep:Lowland (non-LFA)
Page | 36
Table 25 Sheep: Store Lamb Finishing (long keep)
Sheep: Store lamb finishing (long keep)
Per Head
Summary Data
Number of Enterprises
2012-13
Flock size
Total sales
Closing valuation
Total purchases
Opening valuation
Blsa
Total Output Value
Homegrown concentrates
Purchased concentrates
Roughages
Homegrown straw
Keep taken
Vet & med
Sundry Livestock expenses
Forage Costs
VARIABLE COSTS
GROSS MARGIN
Enterprise Income
Output/Input Ratio
Enterprise Margin Performance Data
High Performers
7
330
£94
£/head
£54
£49
£53
£0
£45
All
27
376
£81
£/head
£26
£53
£26
£0
£29
£0
£7
£0
£0
£0
£1
£4
£2
£15
£30
£10,051
3.1
£1
£5
£0
£1
£1
£1
£3
£3
£15
£14
£5,097
1.9
2013-14
Low Performers High Performers
7
7
400
346
£72
£81
£/head
£/head
£2
£16
£55
£43
£2
£13
£0
£0
£18
£40
£1
£7
£0
£2
£2
£1
£3
£4
£20
-£3
-£1,108
0.9
£0
£2
£0
£0
£0
£1
£4
£2
£10
£30
£10,351
4.1
All
29
369
£71
£/head
£22
£51
£14
£0
£28
Low Performers
8
267
£47
£/head
£35
£62
£7
£0
£13
£1
£4
£0
£0
£1
£1
£3
£3
£12
£15
£5,668
2.2
£1
£4
£1
£0
£0
£2
£2
£3
£13
£0
£96
1.0
There was little change in the gross margins compared to 2012-13. The top
performers gross margin was £30/head, average £15/head and the low performers at
zero gross margin. Average flock size was down two per cent while low performers
saw their flock shrink 33% to 267 sheep, while top performers increased by five per
cent. The sales price decreased for all groups, with the average falling 12% to
£71/head. Output value was also down. Low performers had the highest purchase
cost but did not convert this into better sales. Where top performers added 70% to
value between valuations and final sales, the low group only managed a 19% rise with
the average increase being 42% of additional value. The top performers used less
purchased feed combined with lower forage costs per head and lower veterinary and
medicine costs. To confirm this disparity, top performers are converting £1 of inputs
into £4.10 of output whereas the lower group was £1.
Chart 34 Sheep: Store Lamb Finishing (long keep)
Page | 37
Conclusion
Compare performance between 2012/13 and 2013/14
Although enterprise analysis is used to summarise performance within a given year it
is also useful to compare between years. Although the sample is not identical,
general analysis on prices, income, yields and costs can be made between 2012-13
and 2013-14. This is helpful in explaining performance in more detail.
With the exception of winter wheat, all crop enterprises recorded a decline in their
enterprise gross margins compared to the previous year. Dairy cow, beef mixed and
beef finishing enterprises recorded the largest percentage gross margin gains for
cattle enterprises. For sheep, only store lamb finishing (long keep) registered a
positive percentage increase compared to the previous year, with all other enterprises
declining. Based on the average results, both overall enterprise income and the ratio
of inputs to outputs also performed less well in 2013-14. For cereals, a fall in prices of
around 20% impacted on gross margins. Dairy enterprises in 2013-14 had higher
yields and higher prices than in 2012-13. However, there has been a noticeable
reverse in milk prices during 2014-15. Beef enterprise sales prices were, in general,
up on the year pushing output value higher which outweighed a general increase in
variable costs. In terms of the gross margin the top cattle performers did much better
because they added more value to their cattle over the period. Sheep enterprises
compared badly to 2012-13 due to a general fall in prices and increased costs.
Best positive gross margin list
Winter wheat and mixed barley enterprises had the best average crop gross margins.
Average dairy cow and mixed dairy and beef enterprises were the best cattle
performers while finished store lamb production was the best performing sheep
enterprise.
Worst negative gross margin list
Winter barley was the worst performing average gross margin enterprise falling 37%
on the year. Beef hill herds, although improving on the year, still had the poorest gross
margin return for cattle enterprises. Due to a fall in prices extensive/hardhill sheep
enterprises were the bottom performing average sheep enterprise.
Livestock best performance between valuations and final sales
Before accounting for variable costs (excluding dairy cows) the three best performing
livestock enterprises are; mixed dairy and beef with 81% added value, finished store
lamb production at 89% and lowland sheep enterprises at 88% added value. All three
were the top performers within their gross margin enterprise groupings.
The comparisons of costs between the top and bottom performing farms across the
enterprise types show that the bottom performers have higher costs and less effective
trading performance. There is no one single answer to higher profitability but rather a
requirement to look at all aspects of the farm business.
Page | 38
Top performers
The top performing crop enterprises are characterised by better yields and higher
output. They also achieve enhanced prices for their produce. These farmers are also
more effective in controlling the variable costs associated with their activities.
For cattle and sheep enterprises, the higher returns are based on superior technical,
business and market performance.
For dairy farmers, the price per litre for milk produced is the most important factor for
achieving profitable margins. The best dairy enterprises had lower replacement costs
with improved price per head for livestock sold. Also, the top performers are using
more purchased feed but have lower forage and home produced concentrate costs.
There is no optimal level of performance regarding milk yields. Dairy farmers must
look to best practice and be effective managers to maximise value. Although not
conclusive, herd size may facilitate economies of scale and lower unit costs.
Page | 39
Page | 40
1,538
692
641
c
c
560
511
c
429
418
30
c
64
64
c
30
Sheep EGM (£ head)
6
-15
36
c
28
-9
19
-42
c
c
15
0
(£ head)
Sheep EGM
14
Sheep: Extensive/hardhill
51
Sheep: Crossbred Ewe Production
32
Sheep:Finished/store lamb production
26
Sheep: Lowland (non LFA)
c
Sheep: Store Lamb finishing (short keep)
14
Sheep: Store Lamb finishing (long keep)
Performance categories are based on distributions of gross margin results.
c removed due to low sample size.
Cattle EGM
Cattle EGM (£ head)
1,108
751
326
-36
396
139
169
c
344
c
284
18
288
70
135
c
202
-4
201
-27
Dairy Cows
Dairy Followers
Dairy Mixed & Dairy Beef (combined)
Beef: Hill Herds
Beef: Upland suckler selling weaning
Beef: Upland suckler selling yearling stores
Beef: Lowland suckler/herds
Beef: Forward stores
Beef: Mixed
Beef: Finishing
(£ head)
850
477
371
158
212
260
259
145
142
152
229,344
78,739
77,648
c
c
49,826
29,751
c
19,159
40,090
27,987
c
19,663
13,806
c
10,351
Cattle Overall EGM (£)
191,810
153,363
28,803
-3,156
46,403
15,433
7,571
c
29,325
c
24,625
1,273
18,263
4,575
7,358
c
11,791
-204
22,775
-3,470
Sheep Overall EGM (£)
4,647
-9,909
26,618
c
15,000
-3,759
3,773
-3,609
c
c
5,668
96
0.6
c
0.9
0.6
c
1.0
1.7
1.0
1.3
c
c
1.0
1.1
c
1.0
0.9
2.4
2.2
2.4
c
c
2.2
1.9
c
2.4
2.2
2.1
c
2.0
2.2
c
4.1
Cattle
2.0
1.4
1.8
1.3
1.7
1.6
1.5
1.6
1.6
1.5
Sheep
1.2
1.6
1.5
1.2
c
2.2
Enterprise performance summary table: 2012-13 and 2013-14
Output:Input Ratio
Overall Enterprise Gross Margin
Enterprise Gross Margin
Enterprise
2013-14
2013-14
2013-14
2012-13
Upper 25%
Average
Upper 25% Lower 25%
Average
Average Upper 25% Lower 25%
Lower 25%
Average
(£
Crop EGM
Crop
Crop Overall EGM (£)
Crop EGM (£ hectare)
hectare)
3.5
2.5
1.7
33,954
27,253
11,673
1,233
817
385
832
Winter Wheat
c
1.9
c
c
12,591
c
c
443
c
699
Winter Barley
3.2
2.5
1.8
51,955
28,966
11,828
834
574
313
686
Spring Barley
3.1
2.5
2.0
60,400
52,095
37,361
822
608
419
702
Mixed Barley
2.3
1.9
1.4
27,551
12,348
6,219
732
474
233
623
Winter Oil Seed Rape
c
2.4
c
c
9,429
c
c
569
c
839
Winter Oats
4.4
2.3
1.5
19,221
13,524
9,051
921
495
222
747
Spring Oats
c
3.3
c
c
108,039
c
c
4,299
c
4,917
All Potatoes
Tables
Table 26 Enterprise Performance Summary Table 2012-13 and 2013-14
Page | 41
Dairy
Dairy
Dairy
Beef:
Beef:
Beef:
Beef:
Beef:
Beef:
Beef:
Cows
Followers
Mixed & Dairy Beef (combined)
Hill Herds
Upland suckler selling weaning
Upland suckler selling yearling stores
Lowland suckler/herds
Forward stores
Mixed
Finishing
Sheep EGM (£ head)
-32
-56
c
-30
-52
-14
-78
-27
c
c
113
13
Crop EGM (£ hectare)
-18
-2
c
-37
-23
-16
-13
-13
-29
-24
c
-32
-56
-34
c
-13
Sheep EGM
(£ head)
Sheep: Extensive/hardhill
Sheep: Crossbred Ewe Production
Sheep:Finished/store lamb production
Sheep: Lowland (non LFA)
Sheep: Store Lamb finishing (short keep)
Sheep: Store Lamb finishing (long keep)
Performance categories are based on distributions of gross margin results.
c removed due to low sample size.
(£ hectare)
Cattle EGM (£ head)
57
30
-124
-32
-1
7
c
7
c
62
-45
9
368
11
c
-7
95
43
51
33
Cattle EGM
Crop EGM
-21
c
-12
-13
c
-2
26
-10
-4
c
c
19
12
c
26
13
5
c
-13
-12
-20
c
-16
c
Upper 25%
(£ head)
Winter Wheat
Winter Barley
Spring Barley
Mixed Barley
Winter Oil Seed Rape
Winter Oats
Spring Oats
All Potatoes
Percentage Change 2013-14 on 2012-13
Table 1: Enterprise performance summary table: 2012-13 and 2013-14
Enterprise
Enterprise Gross Margin
2012-13
2013-14
Lower 25%
Average
Sheep Overall
0
c
-47
11
c
109
EGM (£)
-58
-41
-12
-51
c
11
Cattle Overall EGM (£)
60
32
-125
-31
-8
6
c
-4
c
123
-49
-1
440
3
c
-15
94
38
31
31
Crop Overall EGM (£)
-50
-6
c
-35
-35
-14
41
-2
-40
-34
c
-42
-12
-34
c
-31
-9
c
-35
3
c
3
-5
-12
0
c
c
-11
-5
c
-20
14
21
c
-10
5
1
c
10
c
-15.8
c
-6.9
-23.9
c
19.1
15.5
-19.4
5.5
c
c
-2.4
9.1
c
21.6
5.4
-8.5
c
-11.6
-5.1
-10.9
c
-41.1
c
Sheep
-17.2
-24.6
-6.5
-5.5
c
19.8
Cattle
11.1
-19.1
9.3
-2.3
13.6
2.3
-1.7
-10.4
11.5
7.9
1.9
-20.9
-11.7
-7.5
-10.3
-29.8
-33.0
-10.6
Crop
-15.4
c
-18.4
19.0
c
33.4
17.2
-10.3
12.7
c
c
4.2
-3.1
c
7.9
1.3
14.8
c
-8.7
-0.4
-11.5
c
3.1
c
Overall Enterprise Gross Margin
Output:Input Ratio
2013-14
2013-14
Lower 25%
Average
Upper 25% Lower 25%
Average
Upper 25%
Table 27 Enterprise Performance Percentage Change Table 2012-13 and 2013-14
Definition of Terms
Livestock Enterprise Definitions
Enterprise
Classification
Dairy Cows
cows utilised of milk production
Dairy Followers
Dairy Mixed
Beef: Upland Suckler Herds Selling Claves
as Yearling Stores
Beef: Upland Suckler Herds Selling Calves
at Weaning
enterprises where more than 80% of the total average livestock
number are breeding heifers.
enterprises where less than 80% of the total average livestock number
are breeding heifers.
Upland herds selling calves between 10 and 14 months old.
Upland herds selling calves around 6 months old.
Beef: Lowland Suckler Herds
lowland, non-LFA (less favoures areas), herds.
Beef: Finishing
enterprises where more than 75% of young cattle are sold finished.
Beef: Mixed
enterprises where less than 75% of young cattle are sold as stores and
less than 75% are sold finished.
Beef: Forward Stores
enterprises where more than 75% of young cattle are sold as stores.
Beef: Hill Suckler Herds
rough grazing accounts for more than 75% of the enterprise.
Sheep: Crossbred Ewe Production
LFA enterprises where more than 50% of ewe lambs are sold for
breeding.
Sheep: Lowland (non-LFA)
finished and store lambs raised on non-LFA (less favoures areas) land.
Sheep: Finished/Store Lamb Production
finished and store lambs raised on LFA (less favoures areas) land.
Sheep: Store Lamb Finishing (Long Keep)
lambs sold finished, where more than 80% are sold after Christmas.
Sheep: Extensive/Hardhill
enterprises raising Black Face or Cheviot pure breds, where less thatn
110% of lambs are disposed.
Sheep: Store Lamb Finishing (Short Keep)
lambs sold finished, where more than 80% are sold before Christmas.
Page | 42
Crop Definitions
Area (ha)
Yield (t/ha)
Production (t)
The area of the crop enterprise in hectares
Total production divided by crop area
Area (hectares) times average yield (tonnes per hectare)
Price (£/t)
Gross Margin (£/ha)
Sales of crops plus the value of closing stocks and value transferred out to other
enterprises.
The sum of gross output less replacement and variable costs
Value of Crop Output
Value of Straw Sold
Total Output Value
The total value of crops produced by the enterprise. Any difference between the
opening valuation of any stocks of previous crops and their ultimate disposal
value (sales, used on farm and any end-year stocks) is included in total farm
output
Monetary value of straw sold
Value of crop and straw output
Fertiliser
Expenditure on purchased seeds adjusted for changes in stocks. Home-grown
seed is included and charged at estimated market price. Any seeds from current
crops and sown, are included in the closing valuation of the crop and hence in
enterprise output.
This includes lime, fertilisers and other manures, and is adjusted for changes in
stock. Fertilisers sown for next year's crops are treated as if they were still in store
and are included in the closing valuation
Crop Chemicals
This includes costs of pre-emergent sprays, fungicides, herbicides, dusts and
insecticides and other crop sprays.
Sundry Expenses
These comprise all crop inputs not separately specified, e.g. marketing charges,
packing materials, British Potato Council levy, baling twine and wire (though not
fencing wire)
Variable Costs
GROSS MARGIN
Enterprise Income
Output/Input Ratio
These are taken to be costs of feed, veterinary fees and medicines, other
livestock costs, seeds, fertilisers, crop protection and other crop costs.
The sum of gross output less replacement and variable costs
Area of enterprise in hectares multiplied by the gross margin value
Ratio of production output to what is required to produce it (inputs)
Seeds
Page | 43
Dairy Definitions
Number of Enterprises
Herd Size
Yield per cow
Gross Margin per litre (ppl)
Gross Margin per head (£/hd)
Count of separate enterprises in the sample
The average number of dairy cows in the milking herd over the year
Annual herd production in litres divided by the average number of cows in the herd
Enterprise Output less the Variable Costs of the enterprise in pence per litre
Enterprise Output less the Variable Costs of the enterprise in £'s per head
Milk sold
Milk used on farm
Livestock sales
Total sales
Closing valuation
Total purchases
Opening valuation
Blsa
Value of milk sold in ppl or £/head
The value of milk and milk products fed on the farm (excluding direct suckling)
Value of livestock sold (per head)
Value of milk sold in ppl or £/head plus, milk used on farm and livestock sales
Value of livestock at the end of the accounting period
Average value of livestock purchases on a £ per head basis
Value of livestock at the start of the accounting period
The change in value of breeding livestock between the opening and closing value
that is due to general market price changes rather than changes in the quality or age
of the herd.
Output Value
The total sales of livestock and livestock products including part of the valuation
change
home grown concentrates
purchased concentrates
roughages
This includes ex-farm value of all home produced cereals, beans, milk (excluding
direct suckling), etc. fed on the farm both from the current and previous years' crops.
This represents expenditure on feeds and feed additives
Feed high in fibre (greater than 18% crude fibre); tends to be bulky, coarse and low
in energy, hay, straw or other coarse feed fed to cattle
home grown straw
keep taken
vet & med
Sundry Livestock expenses
Value of straw consumed
Charges for grazing (seasonal)
This consists of veterinary fees and the cost of all medicines.
This comprises straw bought specifically for costs bedding materials, breeding costs
(including AI and stud fees), miscellaneous dairy expenses, disinfectants, marketing
and storage costs of animal products, Milk Development Council levy and other
livestock costs not separately identified.
Forage Costs
Variable Costs
Value of fodder crops such as hay, silage, root crops and maize
These are taken to be costs of feed, veterinary fees and medicines, other livestock
costs, seeds, fertilisers, crop protection and other crop costs.
GROSS MARGIN
Enterprise Income
Output/Input Ratio per head
Enterprise Output less the Variable Costs of the enterprise
Gross margin times the herd size
Output value divided by the variable cost (ppl basis)
Page | 44
Livestock Definitions (excluding Dairy)
Number of Enterprises
Herd size
Total sales
Count of separate enterprises in the sample
The average herd size
Value of livestock sold (per head)
Closing valuation
Total purchases
Opening valuation
Blsa
Value of livestock at the end of the accounting period
Average value of livestock purchases on a £ per head basis
Value of livestock at the start of the accounting period
The change in value of breeding livestock between the opening and closing
value that is due to general market price changes rather than changes in the
quality or age of the herd.
Total Output Value
Homegrown concentrates
Purchased concentrates
Roughages
Homegrown straw
Keep taken
Vet & med
Sundry Livestock expenses
Forage Costs
VARIABLE COSTS
GROSS MARGIN
Enterprise Income
Output/Input Ratio
Page | 45
The total sales of livestock and livestock products including part of the
valuation change
This includes ex-farm value of all home produced cereals, beans, milk
(excluding direct suckling), etc. fed on the farm both from the current and
previous years' crops.
This represents expenditure on feeds and feed additives
Feed high in fibre (greater than 18% crude fibre); tends to be bulky, coarse and
low in energy, hay, straw or other coarse feed fed to cattle
Value of straw consumed
Charges for grazing (seasonal)
This consists of veterinary fees and the cost of all medicines.
This comprises straw bought specifically for costs bedding materials, breeding
costs (including AI and stud fees), miscellaneous dairy expenses, disinfectants,
marketing and storage costs of animal products, Milk Development Council levy
and other livestock costs not separately identified.
Value of fodder crops such as hay, silage, root crops and maize
These are taken to be costs of feed, veterinary fees and medicines, other
livestock costs, seeds, fertilisers, crop protection and other crop costs.
Enterprise Output less the Variable Costs of the enterprise
Gross margin times the herd size
Output value divided by the variable cost (per head basis)
Related Information
Results from all Scottish Government agricultural surveys can be accessed here:
http://www.scotland.gov.uk/Topics/Statistics/Browse/AgricultureFisheries/Publications
Quality Meat Scotland (QMS) publish their own enterprises margin analysis of
Scottish livestock enterprises. These results contain more technical detail of
livestock enterprises and include net as well as gross margins, though enterprise
results are based on typically smaller sample sizes. QMS enterprise analysis can be
accessed here:
www.qmscotland.co.uk
The Department for Environment, Food and Rural Affairs (DEFRA) in England and
the Department of Agriculture and Rural Development (DARD in Northern Ireland
routinely publish results of enterprise margin analysis, these can be accessed from
the websites below:
England (DEFRA)
http://www.fbspartnership.co.uk/index.php?id=1530
Northern Ireland (DARD)
http://www.dardni.gov.uk/ni-farm-performance-indicators-2012-13.pdf
Contacts
We welcome comments on the content and format of this report, which can be sent
to:
Email: thomas.sharp@scotland,gsi.gov.uk
Tel: 0300 244 9700
Page | 46
Page | 47