AHDB Monitor Farm fine-tunes its machinery policies

Amy Catling explains how our Cambridge Monitor Farm is striking a balance when it comes to the machinery on its books and the crops in the rotation.

Host farmer Matt Redman is keen to make sure all assets and efforts on the farm are fine-tuned to deliver the most value back to the business.

A review of the farm’s approach to machinery and the rotation has stripped back the business to its bare bones, with components only returned when the evidence says it pays to do so.

Matt started a farm contracting business in 2012 that operates across Cambridgeshire and the surrounding counties, covering about 1,280 ha (varying annually).

He started farming his own land in 2017 (Oldfield Farm). A mix of owned and rented land, the farm spans about 231 ha, with a further 170 ha on a stubble-to-stubble basis. In 2022, he became a monitor farmer.

A previous review of 22 Monitor Farm businesses in 2018 showed that machinery costs were often uncomfortably high – on average, accounting for 25–30% of a farm's wheat-growing cost.

Since then, cost pressures have increased. For example, a five-year analysis of combinable crop data in 2024 (AHDB Farmbench data) found that variable and overhead costs increased over this period, by about a fifth for the latter.

Last year, we published information on the characteristics of top-performing farms. Unsurprisingly, controlling overhead costs was one of the strongest recommendations.

At a Cambridge Monitor Farm meeting in January, Harry Henderson (who previously worked at AHDB, John Deere, Monsanto and Rothamsted Research) reflected on the findings of a machinery audit for the farm (conducted by Brown & Co).

The production of low-margin goods, such as cereals and oilseeds, favours high outputs and low costs. As Harry puts it: it is important to “know your costs and make every buck count.”

Harry started the meeting with an analysis of tractor sales since the 1960s, which shows two key trends.

Firstly, increases in average horsepower (to over double what it was). The average power of all UK registered agricultural tractors was nearly 170hp in 2022.

Secondly, decreases in new machinery sales (to about a third of the number of units sold in the 1960s). In 2024, 10,241 units were sold – 13% less than the year before. Only sales for the biggest machines (over 240hp) are increasing.

The current market is tough for machinery dealers. Although prices are not coming down, more basic models are hitting the market to appeal to increasingly price-sensitive farmers.

The machinery reviews consider all the big-ticket items associated with owning machines, vehicles and implements, such as the:

• Purchase price
• Depreciation rates
• Current value
• Repair and maintenance costs
• Insurance and interest costs
• Work rates and fuel use
• Hours used (costs per hour)

Matt’s machinery fleet is as complex as you would expect for a business that manages its own land and offers contracting services.

On top of this, the last decade has been a whirlwind, with the nature of farming almost unrecognisable compared to a decade ago.

At the start of the review (in 2022), the business focus was ‘Regen Ag’, including direct drilling and flying flocks (sheep finished on arable land). The ambition was to drill with less horsepower and machinery.

Since then, Sustainable Farming Incentive (SFI) measures have had a big impact on the business, especially the contracting side. It will be interesting to see how such schemes develop, following the recent closure of SFI applications.

Financial incentives mean many farmers have now invested in direct drilling machinery, which has reduced the demand for the farm’s contracting services.

This has been compounded by increasing areas of land under stewardship schemes, which has reduced demand for his services, especially full-time contracting. However, his flexible approach means that ad hoc, smaller jobs help to fill the void.

Weather extremes, especially wet autumns, are also impacting drilling operations. In recent years, many farmers have been forced to rethink their winter cropping plans, which has boosted demand for drilling services in the spring (especially on light land).

The first audit in 2022 found no major issues with the farm’s labour and machinery capacity.

For the harvest 2021–22 season, the total capital value of the farm’s machinery was about £1.25m.

With the annual depreciate rate set at 12%, it can wipe a lot of value off the accounts (the annual combined maintenance, repairs, insurance and interest costs are similar to the depreciation figure).

The bills for ad hoc maintenance are increasing too, partly due to many modern machines requiring specialist diagnostics.

Matt wants to balance the machinery on the books to return value to the business (and minimise the losses).

Because of all the recent changes, it was deemed unwise to pursue a policy focused on a single (direct drill) system. As a result, the response to the audit was about tweaking the machinery line-up, rather than overhauling it.

To bolster resilience, he recently invested in two new ploughs, a power harrow and a higher horsepower tractor (rated above 300hp) to ensure that jobs get done – even when the weather is catchy.

Dicey weather has also firmed Matt’s plan to keep ownership of sprayers, rather than contracting out the job to others.

With the use of glyphosate in the UK due for renewal later this year and the detection of resistance to this herbicide in the UK (in Italian rye-grass), it has reinforced the need for a flexible approach.

The farm’s rotation has seen major changes.

Originally, it was extremely diverse, comprising spring and winter cereals (wheat and barley), spring and winter beans, spring peas, winter oilseed rape and winter linseed. Matt also continues to grow cover crops ahead of spring crops (as part of SFI). 

Following a Monitor Farm meeting in 2024, the rotation was reviewed and stripped back. The rotation now just includes winter wheat and grain maize, which required the purchase of a new maize drill and combine header.

He opted for maize because it provides a good entry for winter wheat and has strong-margin potential, especially for the more lucrative pet food and wild bird feed market, which he has in his sights.

The shift has also increased contracting opportunities in this area and puts the farm’s grain drier to good use, which is now used all year (it is essential to dry the maize within 36 hours of harvest).

Matt plans to add some diversity back in to the rotation, one crop at time (based on good potential margins).

A main finding of our machinery reviews is that depreciation and replacement are the largest costs associated with machine ownership.

Although new equipment can help to reduce repair costs, farms with some very old kit still achieve low repair costs.

It is important to keep an open mind and evaluate the potential to prolong replacement policies on a machine-by-machine basis.

The shallow tine cultivator has been on the farm for several years and now requires new parts, which could cost as much as £10,000.

The Horsch Avtar direct drill (purchased in 2022) also needs about £3,000 to £5,000 for replacement parts.

It still works for most months, so it is worth investing in. However, Matt will keep a close eye on its work hours to make sure it stays sufficiently busy.

Of course, if money were not limited, he would keep everything (and add a no-till drill to the mix).

Matt is now also more likely to pay extra for a good service plan and warranty to reduce the risk of surprise bills, particularly for machines that are worked harder. He is also mindful that machinery values often drop off rapidly when outside of a warranty.

To help spread the cost of machinery and labour over more hectares, Matt is always keen to take on more contracting work.

Interestingly, the more frequent use of contracting services is also a key characteristic of top-performing farmers.

By providing machinery, labour and skills, Matt is helping to improve the resilience of farming in his patch.