First EBLEX stocktake report shows net margins improving

First EBLEX stocktake report shows net margins improving

Net margins for English beef and sheep enterprises continue to improve and yet the gap between average and top third herds and flocks can be as much as £190 per animal, according to a new benchmarking report from EBLEX.

Average enterprise results show a negative net margin overall, except for beef finishing up to 16 months which is slightly positive.

These are the main findings in EBLEX’s first Stocktake Report, which offers more detailed benchmarking figures and extra data on physical performance than the previous Business Pointers, with EBLEX itself collecting data from a range of English farms with beef and sheep enterprises.

The net margin does not include income from Single Farm Payments, Environmental Stewardship Payments or diversification, which remains a vital part of whole farm income. But it does include family labour, rent or a rental value and interest on working capital.

AHDB/EBLEX senior analyst Carol Davis explains that there are clear improvements in all enterprise net margins between the year to March 2013 and the previous year, with many factors contributing to the gains, including higher market prices for some enterprises. A further improvement on last year is that top third breeding enterprises achieved positive net margins, except in the case of lowland suckler herds.

“The detail in the report shows that top third producers in all beef and sheep enterprises spend significantly less on fixed costs than average performing enterprises. This continues to be a key focus area for producers seeking to improve their net margins,” says Mrs Davis.

The extra information in the Stocktake Report 2013, including splitting out results from disadvantaged and severely disadvantaged farms, plus additional commentary, will allow producers to better gauge their performance against similar enterprises, says EBLEX chairman John Cross.

“The aim is to highlight areas of the business that are performing well and those where there is scope for improvement. We can influence many factors which have a bearing on the bottom line, including physical performance and variable costs. Ensuring that we are performing at optimal levels should help us cope with other areas of volatility.”

EBLEX hopes to include data from even more farms in its Stocktake analysis next year, so any English producers who wish to benchmark their own costs and contribute to next year’s report should email wendy.walker@ahdb.org.uk or phone 024 7647 8885.

Hard copies of the Stocktake report will be distributed to members of the Better Returns Programme in the autumn mailing. If you wish to request a free copy, email admin@eblex.ahdb.org.uk. Alternatively, the pdf will shortly be available to download from the corporate publications section of http://www.eblex.org.uk/publications/ .

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