Last month I discussed what is needed to get your books, records and finances into order for the year just gone.

This month I am looking forward, and hopefully identifying a few ways to save costs in the year ahead without affecting the performance of the farm business.

For this exercise, I am looking at costs under two separate headings, variable and fixed. Labour is a debate for another day.

Variable costs

Variable costs are items such as feed, fertiliser, veterinary and contractors.

Costs that are dependent on the amount of stock you have and the amount of production you wish to undertake.

The best way to stay on top of variable costs is to analyse last year’s figures and see can animal performance be increased by adjusting variable costs to match the output of the farm.

There is no point in being penny wise and pound foolish when it comes to making savings on the farm.

For example, when trying to reduce veterinary costs don’t cut out vaccinations or worm doses if the consequences are reduced animal performance and an increase vet callout fees.

Try and rebalance costs to gain the maximum performance from the farm. Look at meal and fertiliser costs and consider if more could be saved by increasing the fertiliser bill and reducing the meal bill.

Grass 10 is a new campaign from Teagasc. I hope by following this campaign I will be able to increase animal performance from grass thereby reducing variable costs on the farm.

Fixed costs

These are more difficult to control and reduce and do not necessarily depend on stocking rate or farm output.

On suckler farms, fixed costs are generally expected to be around €500/ha. How does your own farm’s fixed costs compare?

If your fixed costs are at €500/ha on a 40ha (98 acre) farm, then your fixed costs for the year amount to €22,000.

Now if this €550/ha figure can be brought down by 10%, then your fixed costs for the year amount to €19,800.

A saving of €2,200 directly into the farmer’s pocket and no effect on animal performance.

Top tips

So how does one go about reducing fixed costs. Again, knowing your figures is the starting point.

Are you spending vast sums on machinery running and repair costs? Would bringing in a contractor save money?

Every time you order a fill of diesel or heating oil ensure you are getting the best value available. Review your banking facilities and possibly make use of the new SBCI Cashflow Support Loan to reduce your bank interest charges.

Consider switching service providers such as telephone and light and heat. There are huge savings to be made just by changing supplier of electricity and using online billing and direct debit.

There are ways to make savings on every farm, but it’s up to each of us to seek out those savings.

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Farmer Writes: Trevor Boland