JVFG benchmarking is now able to deliver new depths of data comparisons and results. One of the latest innovations is the inclusion of ‘cost centres’. JVFG Chair Tim Merry explains why he and others in the group are so delighted to have the new cost centre tool in their cost comparison kit.

The devil is in the detail

“A cost centre is a breakdown of costs for individual field blocks which enables me to identify establishment costs per hectare per crop. In simple terms, it is breaking your establishment costs down in even more detail than we have ever done before. It’s something that I have wanted since day one. As has Jamie Symington in Norfolk, Ian Matts from Brixworth Farming Company and Olly Stratford from EC Drummond in Wiltshire. We all believe that the devil is in the detail.

Counting on cost centres

Tim Merry, JV Farming, Chair JVFG

Tim Merry, JV Farming, is delighted at the new cost centre tool in the JVFG benchmarking kit

At JV Farming we currently have 11 cost centres entered which relate to “in house” farming. Our “contract out” work does not fall within the cost centres. Crops we currently have within cost centres are wheat, spring barley, sugar beet, oilseed rape, rye & maize.

In practice what’s involved is that for each crop, instead of one line of data, I have to enter a line for each of the cost centres. You just have to be sure that all data (task, location and time spent) is entered correctly on time sheets from the start. If you have go back over time sheets to extract that detail needed then entering by cost centre becomes more time-consuming. To be honest, cost centre data entry is not a big deal if you have what you need, and you are flowing and on it.

Seeing the early signs

 “What trends have I seen already? Well, it’s a bit early to draw many conclusions as this facility hasn’t been around that long. To find a significant pattern you need to be looking at cost centres over a period of time. And there could be reasons for the differences. For example, one year on an outlying block we had weather interruptions three times for what should have been a day’s work. So you do have to look for things that influence figures, year on year. But what we should be able to now is to identify is important trends.

 Already, looking at reports for the 2019 cropping year to date through my JVFG data, I can identify establishment costs of £88.80/ha (high) down to £55.36/ha (low) with an average of £75.57/ha across all my cost centres. These figures include all autumn establishment, spraying & fertilising but will still need to add on harvesting & carting once period 3 is complete.

The reasons for high/low difference is down to soil type (extra pass required) and distance away from base which has a negative impact on ha/hr performance. Actual fuel use per block is recorded as well. For example, a 63ha flat land block used 12.1l/ha. A 63ha steep land block used 13.8l/ha. Both were carried out in favourable conditions last autumn.

From data to better decision-making

Now that we are able to identify each individual operation, per crop and per block, we know exactly what each operation costs and can compare. The final figure helps put the right figure on rented ground and to be able to predict where margins are going to be smaller and therefore adjust rent offers accordingly.

At JV Farming what we do not want to do is compromise the strong business we already have by carrying out work on some cost centres that has little or no reward. We do not want to be busy fools!”