Sheep farmers in the uplands face some specific challenges going forward. The loss of Single Farm Payment and the worrying prospects for sheep exports give grounds for concern. Forward-thinking farmers are now considering alternative opportunities using their own resources.
John and his mother farm in partnership in Mid Wales on a traditional upland beef and sheep unit. John lost his father a few years ago and has a young and growing family. He realised that making a sustainable living from an upland beef and sheep unit would not allow his young son to eventually join the business. Therefore, the family decided to invest in free-range egg unit production on some of their low lying land close to the main farm.
The farm is 400 acres, of which 150 acres is owned, has 1,000 Welsh mount and mule ewes and 33 Limousin and Charolais suckler cows. It is quite typical of many family farms in mid-Wales. The current poultry unit has 12,000 laying birds, and eggs are sold to East Anglian egg and eventually go on to Tesco supermarkets.
The farm is in a good location for the enterprise, with other local egg producers in the area. This makes the collection of eggs and supply of pullets and feed viable within the integrated supply chain. John was considering investing in a further building to house 16,000 free range birds. In addition to the diversified enterprise, John has also renovated a local cottage to be let to local, longterm tenants.
John has worked closely with the local planning team regarding another poultry shed, but employed ADAS to look at the following;
- The viability of the current business and how it compares by enterprise to other producers in Wales
- The margins being made on all enterprises and where improvements could be made
- Whether further expansion of the poultry unit gave a suitable return on investment
- To consider whether any of the grants offered by the Welsh Government would be suitable to support the investment plans for the business
- To look at the effect on the business of the forecast decline in the Basic Payment Scheme and the impact on farm income.
The business plan produced was also necessary to demonstrate to any potential lender the likely return that would be made from a substantial investment in expanding the poultry enterprise. The advice given to the client was:
- To consider enterprise benchmarking to compare the performance with other like-minded and successful farmers, but also to show year on year improvement and change
- To draw up a machinery replacement policy to ensure that adequate funds are set aside for investment in new equipment
- To invest in a poultry shed for a further 16,000 birds
- To have confidence in the future knowing that the business is in a strong position and resilient to change but has some minor changes to make to its cost structure
“Having this business plan done by ADAS has given me the confidence that we are a strong business that is doing well. However, we do have some areas that we can improve upon to be even better and I now have the confidence to invest in my new unit.” John, Mid Wales
Contact for more information
To learn more, contact Cate Barrow, or visit our Farm Business Consultancy webpage.