Interest & Opinion

1 Jul 2019

Increasing Profits

1200 feet above sea-level sits Nethergill Farm. It’s here that Chris Clark owns and manages 375 acres with a mix of beef and sheep stock, and a strong conservation focus.

After selling a successful farming business in Surrey, Chris founded a management consultancy firm. The success of this venture funded his purchase of Nethergill Farm, but also gave him a unique perspective on the difficulties facing one of the most challenging branches of modern agriculture – hill farming.

‘There are four main challenges facing Hill Farmers,’ Chris says. ‘Elevation, precipitation, latitude, and geology.’ Effectively, nature has conspired to make it difficult to grow grass in abundance in the Nidderdale area, which makes it harder to feed livestock naturally. As a result, Hill Farmers tend to compensate for by buying in external feed and increasing livestock numbers.

‘The problem is that farmers have been educated and trained to believe that the more they produce, the more money they will make. With our work over the last 14 months, we can accurately calculate a farm’s maximum sustainable stocking rate. If you start to move beyond that, you will lose money.’

This forms the central point of what is now known as the Nethergill Model: once you have more livestock than nature lets you feed for free, increased variable costs such as feed, medical bills and purchased concentrate, mean that although your initial numbers may appear larger, you will inevitably make a loss.

With major change on the horizon for modern agriculture, the reality of the situation is stark. ‘I was asked by Nidderdale AONB to take on the work of helping farmers across Nidderdale to look towards the future, to see how Brexit would affect their businesses. Of all the hill farms we’ve analysed, not one of them was near true profitability.’

But the notion of cutting livestock numbers to increase profit can seem counter-intuitive, and has met with a lot of deeply ingrained resistance.

‘Of all the farms I’ve seen, only nine or ten are thinking about implementing changes I’ve suggested. The rest are finding it very difficult to make that adjustment. They’ve built up family lines of cattle and sheep that go back generations, so me coming in and saying “this doesn’t make financial sense”, really goes against the core of who they are.’

Interestingly, Chris has found that change can be helped along by unexpected sources. ‘Of the farms that are making changes, a large portion of them have done so at the insistence of the farmers’ wives. These spouses are often bringing in outside income to subsidise ailing farms, and they don’t want a big tractor or an expensive tup – they want a properly-run business that generates money.’

So if a farmer finds themselves in this difficult situation, what might a first step look like? ‘If you’re worried about your business and want to make changes, you’ve already made a huge leap,’ Chris says. ‘You can talk to your accountant, look into LEP funding, or go straight to consultants such as myself.’

Although the road to change can be difficult, the rewards are surely worth the struggle. ‘For me, hill farming is about balancing the needs of food, farming, nature, and the community in that area.  If we lose hill farmers because they haven’t adapted, or the support mechanisms aren’t there, the communities will suffer. The adaptation has to bring into play everything they know about running farms, while believing that it is profit that drives the business, not production.’

Chris Clark

ABOUT THE AUTHOR

Chris Clark

Chris is a Partner in Nethergill Associates; a business management consultancy with expertise in financial management, marketing, farm business planning and managing future farming uncertainties. A former farm tenant and farm manager, he has thirty years of business management experience within the agriculture and allied food industry. Chris owns and manages Nethergill Farm along with his wife, Fiona, where they are currently building an eco-hill farm business with a sustainable added-value meat activity, an educational and field study facility and eco-tourism holiday lets.

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