Friday, December 6, 2019

LMR: Focus on labour, machinery and resources for farmers

October 1, 2019 by  
Filed under Profiles

Top speakers will be on hand for the best cost-management advice at LMR event.

Farm costs and how to manage them will be under scrutiny at next month’s LMR autumn conference, which takes place in Lincolnshire.

Called Change and its efficient implementation – the Opportunities and Pitfalls, the conference starts at 2.30pm on 25 November at the Branston Hall Hotel, near Lincoln. It will be followed by a two-course meal.

“Farming faces some big changes over the next few years, says LMR western region manager Andrew Beckingham. “We are looking to help our members navigate that change successfully – whatever their farm business.”

Optimising business efficiency is likely to involve reducing costs – which might involve machinery, technology or co-operation, says Mr Beckingham.

“Although we are a machinery ring, and we tick a lot of the boxes, we are also involved in the efficient buying of inputs – and raising awareness about the risks and opportunities of change and what you should be looking at to get your costs down.”

Joint ventures

Keynote speaker will be NFU deputy president Guy Smith, who will be talking about the impact of Brexit – the threats and opportunities – and how the NFU is fighting for the best deal for growers and livestock producers.

Joint ventures and sharing machinery will be among the key topics. Accountant and farm business consultant Gary Markham will be concentrating on business structure/scale and costs of production and business efficiency, managing business changes and business viability from an accountants’ perspective. As well as discussing machinery syndicates and joint ventures. 

Former farm manager Robert Knight, who is now a consultant for Fisher German, will look at some practical experiences, consider how to interrogate performance and make changes for the future. What are some of those opportunities?  Touching on different techniques and technology to see how they influence the cost of production. He will also mention and refer to contract farming agreements, share farming and JV’s.

Original thinking

LMR is a co-operative working with farmers, contractors and rural businesses to satisfy their machinery and labour needs. It also supplies farm inputs at group rates with the aim of reducing operating costs and improving business efficiency.

Originally formed by three farmers in 1991 as the Lincolnshire Machinery Ring, today the cooperative trades as LMR under the slogan Labour, Machinery, Resources – reflecting the additional services it offers.

The original thinking behind the ring was that members with equipment not being used by them at the time would make it available to other members, but Mr Beckingham says it rapidly became clear that specialist service providers would be needed as well.

Today, the group has been moving labour and machinery between its members for 28 years. All agricultural activities are covered across the full range of enterprises. And all 550 members have access to a back-up supply of machinery and labour to cover unforeseen circumstances.

“All our members have access to a big inventory of machinery, equipment and resources,” says Mr Beckingham. “It gives them peace of mind – and we can usually get hold a specific piece of equipment if somebody needs it – we link people up.”

This is an increasingly popular and important service at a time when tight margins and rising machinery costs make owning equipment without fully utilising and expensive and sometimes unaffordable choice.

“There is a lot of equipment out there looking for work,” says Mr Beckingham. “But although we are a machinery ring, the bulk of our activity and turnover comes from the buying group side of the co-operative.”

Other inputs

Inputs supplied to members include fuel, gas and lubricants. Significant growth is also being seen in supplying concrete and in hiring tractors, trailers and plant. The group is also successful with deals on electricity, telecoms, wearing parts and tyres.

In terms of labour, the group has specialist Gangmaster Licensing Authority licensed members who deal with the high volume of bookings via LMR. This is a popular service – especially as permanent farm staff have reduced in numbers over recent years. The supply of gangs to pull black grass and weed beet have proved to be particularly popular.

“Farmers have reduced labour levels in general, resulting in little spare capacity; the decline of mixed farming has resulted in general farmhands having little experience of animal and the specialist skills of stockmen mean they can’t easily be supplemented at short notice.”

Many LMR members come from Lincolnshire, Nottinghamshire, Leicestershire, Rutland and Northamptonshire – but some come from further afield, including South Yorkshire, East Derbyshire and North Cambridgeshire.

About 10% of members are ‘pure’ suppliers, but most still offer services as well as buying in facilities. The tendency of most farmers to ensure they are equipped a little beyond their actual needs can often mean there is an excess of supply.

In a normal year, this means there is little difficulty in finding spare combine capacity at harvest, for example, but that can be to the benefit of members needing such support.

Opportunities

Mr Beckingham joined LMR in 2002 when it merged with the East Midlands group EMTAK, with whom he had been working. His area now includes Nottinghamshire, south Lincolnshire, Rutland, Northants and Leicestershire. His colleague Jayne Hunt looks after the eastern region.

Two decades on, farmers are more open to new opportunities, says Mr Beckingham – and more willing to consider collaborative approaches to cutting costs. “ By working together we find new opportunities to develop our businesses and grow stronger.

“The aim is to procure the inputs that the members need in their businesses at preferential rates by utilising the buying power of our membership. Agriculture and rural businesses operate in a dynamic business environment.

“We are looking for new ways to bring members benefits as the challenges occur.  The diversity of the enterprises within our membership, mean that we have satisfied or can develop solutions to a wide range of requests.”

The overall goal is to help farmers realise the benefit that much larger organisations can bring to members, he adds. “The more people who are in on a deal, the better that deal is likely to be for all of them, which is what being in a group like this is all about.”

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