Spotlight:

Where Dairy Farm Cash Flows

Where Dairy Farm Cash Flows
Where Dairy Farm Cash Flows

5 July 2017, by Ian Bailey

A wide range of results indicates opportunities to improve performance

Summary

A new piece of joint research from Savills and Duchy and Bicton College's Rural Business School suggests that new technology and a general increase in herd size has driven investment in land, buildings and machinery.

The distribution of FBI per cow and by herd size shows a wide range of results either side of the trend line. This indicates that there are opportunities to improve performance through best practice.

 

Results in measuring performance by farm tenure illustrate that ‘mainly tenanted’ farms are, on average, larger with more cows which have higher yields resulting in higher FBIs and more cash.

Alternative forms of tenure and collaboration could benefit farm businesses that are unable to expand due to resource constraints. The right agreements and an enthusiastic resolution to find an innovative solution to current issues might create a long term sustainable business.


About the research

The project analysed an identical sample of 63 specialist dairy farms in the South West of England from the Farm Business Survey over the six year period 2010/11 to 2015/16. The farms were all in dairy for this period using a range of production systems and selling to various types of buyer. Just over 15% had organic status. We specifically looked at investment decisions on these farms, and how the fund flow of the businesses changed.

Fund flow shows how much of the Farm Business Income:

■ was available as cash to the business, and

■ how much was re-invested back into the business,

■ was taken as private drawings by the farm family, and includes

■ movement in or out of the business of private funds, and

■ changes in external funding sources like loans and overdrafts.

Articles from 'Spotlight: Where Dairy Farm Cash Flows'

Introduction

05 July 2017

Introduction

A new piece of joint research from Savills and the Duchy and Bicton College's Rural Business School

Business challenges

05 July 2017

Business challenges

Whatever system is being operated, whether extensive, intensive, Channel Island, organic, the points below are relevant to your business and can help maintain competitiveness in challenging times

 
 

Receive the latest research

Retail Properties

Key contacts

Ian Bailey

Ian Bailey

Director
Rural Research

Savills Margaret Street

+44 (0) 207 299 3099