Whilst farming has its own key fields in which farmers and farm managers must succeed to eke out a profit, the importance of the “numbers” can often be misunderstood or forgotten about completely.
With the Brexit decision leaving many farmers wondering where the next subsidy is going to come from, cost analysis and performance monitoring can prove to be key factors in farmers turning a profit over the next few years of uncertainty.
For example, in the rearing of lambs, how many farmers can honestly say they can place a cost per head and therefore have a margin calculated for each lamb/ewe sold?
This is just one of the measures being taken by many farmers now in order to be able to consistently monitor their costs, and as a result, their bottom line. Cost control is proving to be the key difference between success and failure across all types of farming.
Of course, this requires an accurate and successful record keeping system. With this in place, realising and apportioning costs as necessary can often be the easier part of the process. And not to mention the smile on your accountant’s face when presented with your new records system.
Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.