When running a farming business, it can often seem as though the money goes out faster than it is coming in, with a seemingly never-ending array of expenses and profits being dictated by the ever-unpredictable weather and market values. A lot of time can be spent pouring over the books to see where savings can be made but, as we are all aware, there is only so much you can do before yield, quality and timeliness start to be affected.
Some costs such as machinery and labour and variable costs such as seed, fertiliser and chemical are fairly fixed. With regards to seed, fertiliser and chemicals, most producers are using optimum levels and would be foolish to reduce these and consequently reduce yield. The days of buying all inputs from one merchant are long gone and so the inputs market is reasonably competitive.
Beyond these, there are some savings to be had. For example, fuel and power is an obvious one where decent savings can be made. We have a number of clients who obtain gas and electric quotes annually and have saved thousands over their original bills. Definitely worth a few phone calls to get the most competitive tariffs. Bank interest rates and charges can also vary considerably across the market and are worthwhile looking into. Furthermore, accountancy charges can also be scrutinised as there is a massive discrepancy between what different customers are charged for this service. As with all things like banks and accountants, as well as others like land agents, there is also a value in the quality of the advice which should be taken into account when analysing these costs.
Now we come to insurance. Insurance and the associated premiums are often scrutinised because, until something happens, it can seem to be less tangible than things like machinery, labour and electricity. However, as those of you who have had a claim are aware, it can suddenly be incredibly tangible in the event of a fire, accident or theft.
As with all other professional services, the quality of advice and claims service has a significant value, equally as important as the premiums that are being charged. However, it is possible to get both good advice and benefit from the most competitive premiums. This is because the insurance market is very competitive at the moment, with premium rates as low as they have been in over a decade. If you have not had an alternative quote for the last three years or more, you will almost certainly be paying over the odds for the cover that you currently have, meaning that savings can be made without cutting back on cover.
It’s also worth considering that advised levels of cover for things such as public liability have changed over recent years and so your existing cover may not be enough. At Acres, we are usually able to provide wider cover whilst also saving our farming clients money. We can also advise on where you are paying over the odds on your premiums, for reasons such as having out-of-date market values for tractors and machinery on your insurance or for having some poorly managed claims influencing your claims history.
Any professional farm insurance broker will expect to come out to see you, gain an understanding of your farming business and understand what your goals are with regard to insurance cover. It’s well worth the three to four hours spent in the office with an Acres Insurance broker, as it can often lead to savings of thousands of pounds and peace of mind knowing that your business is properly covered.
Milk and no sugar please, and we’ll never turn down a chocolate hobnob during the process.
