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Brookfield's bumpy ride
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Message 1.听
Posted by Seveek (U13636812) on Thursday, 5th January 2012
Dear Tayler,
Mr Peacock, with Mr Harvey鈥檚 connivance or, worse, silence, has introduced a storyline which totally misrepresents the state of British farming to the non-farming listener.
This one of the most outrageous, totally misrepresentative, irresponsible storylines imaginable. Mr Peacock is unlikely to enter a debate on these pages, but I feel he should explain his logic somewhere on the board.
鈥淏it of a bumpy ride, think about the options, tough choices . . . . .鈥 David says.
It remains the case that someone has read about the demise of some dairy farmers and just assumes is must be the same for Brookfield while letting the far more exposed Bridge Farm sail serenely on.
I have demonstrated on previous posts that Ruth & David are capital rich and their income is of executive proportions. But this is too important to let go.
The average milk herd size is 176 and Brookfield has 190. But the number of farms under 176 is much greater than those above it. The dairy farms which are giving up are the smaller, inefficient ones of under 100 animals who have not been able to invest in the latest parlour technology, which means they have high labour costs, and do not have Brookfield鈥檚 other resources such as the generous amount of quality grazing, the ability to make their own silage and forage hay and to grow their own feed such as the beans, fodder beet and forage maize. It is a fact that, whilst small farmers retire, the others become larger, more productive and more profitable. Milk yields per cow have risen exponentially over the last ten years (I have the definitive figures)
Brookfield is not reliant on the external forces of the commodity markets save for things they must buy in such as diesel and electricity but they are easily compensated for by the rise in farm gate milk prices which, according to the Dairyco Datum League Table, averaged 26p per litre in June this year and was 29p by October and around 5p up in the last 12 months.
An extra 1p a litre means an additional 拢13,000 PA to Brookfield so that 3p means 拢39,000 additional profit PA. Their income is 拢50+ grand higher than last year with no equivalent cost increase. This is a joke, Mr Peacock, their income is rising, not falling.
Before looking at this further, Brookfield鈥檚 profit is obvious from a very basic comparison with a smaller, rented farm:
If they rented the land at a reasonable market rate it would cost 拢31K PA.
Then they used to have Sam's wages, with employer costs around 拢35K PA.
So they are already 拢66K ahead of the tenant farmer with a wage bill. That is why the smaller ones are disappearing.
Then they start to make money:
Brookfield鈥檚 SFP is in the region of:
Land 拢13,490
Dairy 拢29,585
SFP Total 拢43,075
They start with 拢43K PA without turning a sod or spreading any slurry and with no rent or labour to pay.
Now they actually start farming. Their approximate, rounded net profit is:
Milk 拢75,000
Sheep 拢25,000
Corn 拢20,000
Beef 拢20,000
Farming income 拢140,000 pounds per annum.
Total net profit 拢183,075.
Even were I 50% out on the operating profit (which I am not), they still make 拢113, 075 per year.
If we consider that 68% of Borcetshire holdings have less than 120 acres (Brookfield has 479) then we start to see the difference. Those 1420 farms will only have either milk or sheep or corn or beef and they are the ones who struggle on 拢20-30K PA. These are actual figures for a county known to be where they are. Brookfield has all of those outputs plus no mortgage, no rent and massive borrowing power because of the assets.
Consider their assets, Mr Peacock. All figures are based on actual land prices in Borchestershire and real values of a building with land.
They might sell:
The Farmhouse (inc 20 acres) 拢1,200,000 (local example, details available).
Cottage (inc 5 acres) 拢500,000 (acquaintance just paid 拢550K for a semi with 6 acres)
Bungalow (inc 5 acres) 拢500,000
Value of land at 拢6500.00 per acre (real Borchester average) for 449 remaining acres gives 拢2,918,500
The milk quota would realise 拢45,000 (@ 拢.035 per litre)
Farm equipment. Your guess, Mr Peacock. In the meantime, let鈥檚 assume 拢200,000.
That comes to an asset value in the region of 拢5,363,522. No mortgage, Gill鈥檚 small pension. Heavens, they are in dire straights.
Mr Peacock is 鈥榓vin a giraffe. A bank manager would not only have been in regular contact with David, David would be able to borrow hundreds of thousands by just making a telephone call.
What is more incredible, unless Mr Peacock can explain why, is that David would have had a significant amount to invest elsewhere each year. We know they spend little so might have put 拢50K away a year. Work it out for yourselves plus interest. Smaller farmers than he sent children to private schools, have large vehicles and holidays.
Anyway, tell me this logic is incorrect.
The dairy cows:
190 milking cows with 15% dry at any one time using an industry standard average of 7,965 litres per cow gives 1,286,348 litres per year at 28p per litre. Income is 拢360,177.30.
The costs are:
Concentrates -80659.90
Forage -11125.50
Benefit of own forage 15845.00
Rates -6394.66
Water -23893.23
Electric, fuel etc -55627.52
Eddie wage -5824.00
Vet's bills inc vaccination -27813.76
Maintenance % -26979.35
DeprMach/Builds % -26979.35
Replacements % -29204.45
Insurance -4000.00
Telephone / Office -1000.00
Bank / Accountant -2000.00
Net cost -285656.72
Concentrate use is based on a recognised standard of 0.29 KG / Ltr. DairyCo say the feed cost per litre is 6.92p.
My estimate of concentrates and forage is much too high but fits remarkably closely with a quotable example in a farming magazine which suggests 29% of sales.
Rates are for real Borchestershire examples for a farmhouse (Band H), cottage and bungalow (Band E).
Water:
Milk cows 190 @ 40 gallons = 7,600 gallons
Followers 85 @ 20 gallons = 1,700 gallons
Beef 85 @ 20 gallons = 1,700 gallons
Total cattle 360 at 11,000 gallons per day = 4,015,000 gallons per year which is 18,250 cubic meters at the current price of 拢1.1078 per cubic meter = 拢20,217.
I have estimated 730,000 gallons per year for other uses such as washing down which is 拢3,676.
But I suspect they have extraction rights from the Am (be really stupid if not) so this is high as well.
Electric, fuel and sundry consumables. I have extrapolated from known equivalents. I might expand but it is clearly an overestimate.
Eddie鈥檚 wage. 7 hours per day for 2 days per week gives 728 hours per year @ 拢8. But I doubt they pay that much.
Vets bills. This is a quotable percentage cost, But it is too high otherwise Alastair would only need 3 customers.
Maintenance and depreciation are based on 9.7% of sales and is an accepted industry accounting allowance. They do not spend that much a year so a good part is additional profit.
Replacements costs are at an industry standard but we know they have 85 followers so probably do not spend this much, rather just the odd one to improve the line.
Insurance, telephone and general office costs and bank and accountant charges can only be estimates but I know real equivalents and am not far out.
Mr Micawber would have been happy 鈥楢nnual income 拢360,177.30, annual expenditure 拢285,656.72, result happiness鈥
Then we have the other interests:
70 acres of cereals @ 3 ton per acre at 拢160 per ton (Oh yes it was) gives a revenue of 拢33,600 with a cost per acre of 拢206.60 (industry average) = 拢14,461.83 making a profit of 拢19,138.17
340 lambs which sell at 拢150 giving 拢51,000 at a cost of 拢80 each is 拢27,200 making a profit of 拢23,800.00
They have 85 beef cattle. I have some calculations but suggest 拢20K profit.
I have not given the workings for these other interests but, if one considers that 68% of Borchestershire farms are under 120 acres and they make a living of sorts from just one of these Brookfield鈥檚 specialities, it is in line with farm incomes published earlier this year.
Please, Tayler, and a really pretty please, ask Mr Peacock to explain how Brookfield can possibly have cashflow, profit or borrowing problems. At the same time, please ask him not to nitpick individual figures as that would run and run. He should put up his own accounts and show us how and why they are not making a very good living.
Thank you,
Ian.
And I鈥檝e missed the potatoes which would have given them a further 拢14,400 profit, poor things. -
Message 2
Posted by Organoleptic Icon (U11219171) on Friday, 6th January 2012
Seveek I love you.
In a platonic way. -
Message 3
Posted by Dragonfly (U2223700) on Friday, 6th January 2012
All figures are based on actual land prices in Borchestershire听
Gosh! I've never managed to find it on a map.
Facetious comments aside, I'd be interested to hear Ayrshire Cowman's comments on this. -
Message 4
Posted by carrick-bend (U2288869) on Friday, 6th January 2012
Mr Peacock is 鈥榓vin a giraffe. A bank manager would not only have been in regular contact with David, David would be able to borrow hundreds of thousands by just making a telephone call. 听
That's exactly what I thought, but thanks for providing all that supporting detail.
拢20,000 seems like petty cash for a business of that scale. -
Message 5
Posted by Reggie Trentham (U2746099) on Friday, 6th January 2012
I'd be interested to hear Ayrshire Cowman's comments on this.听
Me too. It would probably be better in DtA where he and others who really know about farming, particularly dairy farming, could comment on it. -
Message 6
Posted by carrick-bend (U2288869) on Friday, 6th January 2012
Yes, Seveek - if you take out the references to Tayler, maybe you could re-post in in DTA?
I'm another one who thinks it deserves a wider audience. -
Message 7
Posted by barwick_green (U2668006) on Friday, 6th January 2012
< I'm another one who thinks it deserves a wider audience. >
Yes, it certainly does. (Any chance of the Plague Farm balance sheet too?) -
Message 8
Posted by Buntysdaughter (U7084475) on Friday, 6th January 2012
Respec', Seveek !
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Message 9
Posted by _ShropshireLad_ (U10844552) on Saturday, 7th January 2012
The only thing I can think of is the milk yield which they are always moaning about.
Your figures have the dairy herd bringing in 拢360,200 in milk for costs of 拢285,700 and a profit of 拢74,500 roughly.
If the milk yield were to drop 10% for the same costs that would halve the profit, 20% would virtually wipe it out.
I have no idea whether such a yield drop is realistic, just that a gross profit margin of 20% is not that robust for any business. -
Message 10
Posted by barwick_green (U2668006) on Saturday, 7th January 2012
< a gross profit margin of 20% is not that robust for any business. >
Not to worry; the pair of dozy twits will 'muddle through as always' just like David says. -
Message 11
Posted by Tayler Cresswell - Host (U14232848) on Sunday, 8th January 2012
Hi Seveek
I'll pass on your post to Steve Peacock. You may have seen a post he wrote on the blog back in November about Brookfield and the dairy which may cover some of your questions.
Tayler -
Message 12
Posted by barwick_green (U2668006) on Sunday, 8th January 2012
Hi Seveek
I'll pass on your post to Steve Peacock. You may have seen a post he wrote on the blog back in November about Brookfield and the dairy which may cover some of your questions.
罢补测濒别谤听 ....and, hoping not to sound aggresive, while you are there Tayler what's the real situation about housing association tenancies and the assigning of new joint-tenants please (let alone well-meaning but amateur 'improvements' to same without any permission from the landlord)?
In my area a some was evicted from a two bedroom house owned by a housing assocation (ALMO) after the death of his surviving parent. Even though the some had lived there since birth .- more than 50 years ago - the county court ruled that he could not assume the tenancy and re-housed him in a bedsit some miles away. I think the case went to the high court who found emphatically in favour of the landlord.)
I find it incredible that all Tracey has to do become a legal co-tenant is for her to browbeat her dad into writing a letter to the HA and, hey presto!. the housing fairy pays yet another visit to Ambridge. -
Message 13
Posted by barwick_green (U2668006) on Sunday, 8th January 2012
'some' = son
D'oh! -
Message 14
Posted by ayrshire-cowman (U2259898) on Monday, 9th January 2012
Laughable.
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Message 15
Posted by carrick-bend (U2288869) on Monday, 9th January 2012
Morning, A-C.
As I'm rather hard-of-thinking this morning, could you clarify whether it's the SWs views of the balance-sheet of Brookfield, of Seveeks, which you find laughable, please? -
Message 16
Posted by Tayler Cresswell - Host (U14232848) on Monday, 9th January 2012
Hi BG
what's the real situation about housing association tenancies and the assigning of new joint-tenants please (let alone well-meaning but amateur 'improvements' to same without any permission from the landlord)?听
We haven't heard on air whether they have or haven't sought permission to make changes to the house, so I don't think we can assume they haven't or won't do so.
I find it incredible that all Tracey has to do become a legal co-tenant is for her to browbeat her dad into writing a letter to the HA and, hey presto!. the housing fairy pays yet another visit to Ambridge.听
As this hasn't happened yet, I'm not sure there's a lot I can comment on here! : )
Tayler -
Message 17
Posted by barwick_green (U2668006) on Monday, 9th January 2012
Thanks T.C. (Do your intellectual close friends get to call you T.C providing it's with dignity.? No need to answer and probably before your time anyway!)
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Message 18
Posted by Organoleptic Icon (U11219171) on Monday, 9th January 2012
Tayler
1) As Neil plans to start work next weekend there is no possibility of them having obtained permission, or of them doing so. So unless a halt is due; no permissions.
2) As to the co-tenancy, we have been told that she has spoken to the HA who have told her it simply requires dad's application. So unless she is lying, that IS a done deal, whatever the naysayers here think.
Was the HA happy about the proposed occupancy level? And about opposite sex sharewd bedrooms?
How old are Brad and Neasden? -
Message 19
Posted by ayrshire-cowman (U2259898) on Tuesday, 10th January 2012
I`m loving the idea of a 190 cow dairy with a wage bill of under 6K.
3p a litre rise in milk price this year and NO extra costs?
Brookefield built a parlour that somehow milks 170 cows in a twinkling - but cost buttons.
Ruth manages the milking - and the calves and the paperwork and the family - without endangering her health in any way.
They get massive intensive yields - from extensive grass based low cost system.
Dairy cake this winter is 拢250-260 a tonne whereas last year more like 拢215.
At 0.33 kg a litre feed rate ( a more realistic figure for 8000 litre yields that`s 1.5 p of the 3 p gone there alone.)
Machinery repairs? , electricity, wage costs. Vet bills have soared lately.
Lots of suppliers tell me they just can`t get money in from dairy clients - so not many making profits of 180K. -
Message 20
Posted by carrick-bend (U2288869) on Tuesday, 10th January 2012
Thanks, A-C.
-
Message 21
Posted by Spartacus (U38364) on Tuesday, 10th January 2012
And, of course, we haven't addressed the biggest expense.
Have you /seen/ how much village shops charge for frozen pizzas? -
Message 22
Posted by ayrshire-cowman (U2259898) on Wednesday, 11th January 2012
The milk price of 28 p is right at the top end for 2012.
If these were historical costs then the milk price would be 2 p lower at least.
If you are looking at forward costs then the concentrate bill could be 2.5 t @ 拢250 =拢625 per cow or approx 120K- which is 拢40K more than allowed for.
Where are the fertiliser costs? -
Message 23
Posted by Organoleptic Icon (U11219171) on Wednesday, 11th January 2012
Where are the fertiliser costs?听
Don't they use all that slurry? -
Message 24
Posted by Tayler Cresswell - Host (U14232848) on Wednesday, 11th January 2012
Tayler
1) As Neil plans to start work next weekend there is no possibility of them having obtained permission, or of them doing so. So unless a halt is due; no permissions.
2) As to the co-tenancy, we have been told that she has spoken to the HA who have told her it simply requires dad's application. So unless she is lying, that IS a done deal, whatever the naysayers here think.
Was the HA happy about the proposed occupancy level? And about opposite sex sharewd bedrooms?
How old are Brad and Neasden? 听 Hi OI
I'm not sure exactly how old Brad and Chelsea are - they're primary school age, so under 12.
I got in touch with the team about your other point:
The plan for Tracy to become a joint tenant with Bert was researched with the National Housing Federation and it is perfectly possible for this to happen in a straightforward way.
As a tenant of long standing it is also possible for Bert to carry out improvements to his property, including a new bathroom or kitchen. Neil/Bert wouldn鈥檛 be doing the work without the necessary permissions.
Tayler -
Message 25
Posted by Tayler Cresswell - Host (U14232848) on Wednesday, 11th January 2012
Thanks T.C. (Do your intellectual close friends get to call you T.C providing it's with dignity.? No need to answer and probably before your time anyway!)
听
Not before my time BG! Presuming you're referring to Top Cat. And yes, I did!
Tayler -
Message 26
Posted by Organoleptic Icon (U11219171) on Wednesday, 11th January 2012
Thanks Tayler. I am always amused how many people here make absolute statements that things on TA are wrong
Neil/Bert wouldn鈥檛 be doing the work without the necessary permissions.听
Obtained very quickly! But I think drama is allowed license.
Cheers
Steve
PS I have just had a post uncensored on appeal!
Must do it more often when I cannot understand what was supposed to be wrong. Now I know how to avoid the loops in the process and to copy/paste the whole deletion notice! -
Message 27
Posted by joe (U13868420) on Wednesday, 11th January 2012
The plan for Tracy to become a joint tenant with Bert was researched with the National Housing Federation and it is perfectly possible for this to happen in a straightforward way听 Mentioning that two young children of would being moved in as well? Or that an apparently dependent adult already lives there?
According to poster Jeremy Farthing: As a borough councillor and member of a housing association board, and having just asked one of our officers, I can state that Tracy has no chance.听
An interesting alternative interpretation, from someone with demonstrable experience in the field. Neil/Bert wouldn鈥檛 be doing the work without the necessary permissions. Obtained very quickly! But I think drama is allowed license.听 听 This is a bit /too/ quick even for dramatic purposes.
It would be interesting to know /exactly/ what the experts consulted were asked.
Is it permissible for a long-term LA/HA tenant to fit a new bathroom and/or kitchen?
No problem there, I'm sure - /with/ /written/ /approval/. (This is certainly a requirement for Birmingham City Council properties - checked that example as being the nearest to the Mailbox)
Is it permissible for such a LA/HA tenant to /convert/ a room to a completely new use (including water supply and sewage)?
This is a very different matter, surely? Now we're talking about building regulations, surveyors, possible (probable?) change of value.
Even if it /were/ allowed, that permission would take rather longer than the timescale mooted in this case. Less than a week, in the middle of the Christmas and New Year holidays? I rather doubt it鈥
Oh - and the work will be carried out /not/ by a registered builder but by the new tenant's brother-in-law, a local pig farmer. -
Message 28
Posted by _ShropshireLad_ (U10844552) on Wednesday, 11th January 2012
Oh - and the work will be carried out /not/ by a registered builder but by the new tenant's brother-in-law, a local pig farmer. 听
Neil did build Pig-Ark View himself, so he must have the necessary sustiffickits. -
Message 29
Posted by carrick-bend (U2288869) on Wednesday, 11th January 2012
You don't need "sustiffickits" to do your own building work - if you make a lash-up of it, it's you that has to face the planning and building regs inspectors.
It's a bit different when the property isn't yours, but belongs to a housing association. -
Message 30
Posted by _ShropshireLad_ (U10844552) on Wednesday, 11th January 2012
It's a bit different when the property isn't yours, but belongs to a housing association. 听
OK, see what you mean. Actually, when I think about it most people in HA accommodation have to get in their workmen to do anything non-trivial, don't they? -
Message 31
Posted by carrick-bend (U2288869) on Wednesday, 11th January 2012
I'd think so - it's an insurance for the HA, as putting right botched building work almost always costs more than getting it done properly in the first place.
-
Message 32
Posted by joe (U13868420) on Wednesday, 11th January 2012
It's a bit different when the property isn't yours, but belongs to a housing association.听 Entirely different - the housing association has a duty of of care towards its tenants, including compliance with all sorts of regulations. Neil and Susan's house will, of course, be subject to many of the same regulations - they would be checked when applying for planning permission - but they have only themselves to blame if the work isn't up to scratch. The housing association is required to show that work is done properly.
I'd be very surprised if it's even /legal/ - never mind advisable - for a housing association to allow work of this magnitude to be carried out by anyone other than a registered builder. -
Message 33
Posted by Tayler Cresswell - Host (U14232848) on Friday, 20th January 2012
Hi Seveek
Steve Peacock has sent me a response to your query about Brookfield:
If only David and Ruth had the same take on Brookfield's finances as you... and could take an equally dispassionate view of their predicament. Perhaps they're just too close to it. I'm sure you could make an argument for cross-subsidising the dairy enterprise from the profits made elsewhere on the farm, but I don't think they see that as a sensible way of running a business any longer and they're certainly not tempted to sell off the family silver to subsidise milk production.
As they see it, or at least as David sees it, they need to do something serious to get that side of their business onto a profitable footing or admit defeat and concentrate on things that are working for them. The unexpected cost of replacing the slurry storage, on top of rising costs generally, has been the final straw in that long-running thought process. But who knows how it'll all shake out in the end? (Well obviously I do, but I'm not telling). 听
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