Financial Benefits of 'Pasture for Life' Practices Proven Effective
In a groundbreaking study published in the July 2021 issue of Direct Driller magazine, the SEEGSLIP research project found that Pasture for Life (PfL) farms in England consistently outperform Farm Business Survey (FBS) farms in terms of financial performance.
The findings reveal a number of key differences between the two farming systems, with PfL farms achieving notably better profitability metrics, improved economic resilience, and cost efficiency.
Higher Profitability
PfL farms demonstrate a more efficient use of resources and potentially lower input costs associated with the PfL system. For instance, the average Gross Margin (GM) for breeding sheep on PfL farms is 33% higher than the lowland FBS average, with PfL farms based in the uplands boasting a much better GM of £41/head compared to the average upland farm in the FBS survey at £21/head.
Improved Economic Resilience
The financial structures and practices of PfL farms make them more resilient to market fluctuations, possibly due to diversified income streams and sustainable land management. This resilience is evident in the top PfL farms, which make a higher GM of £106/head for breeding sheep, compared to the top FBS farmers at £93/head.
Cost Efficiency
PfL farms typically maintain lower expenditure on inputs such as fertilizers, pesticides, and feed, contributing to improved net margins. The main reason for these results is that the variable costs on PfL farms are much lower than for the FBS farms - at £21/head average for PfL, compared to £53/head for the lowland FBS average and top farms.
Sustainable Practices Linked to Economic Benefits
The integration of sustainable grazing and ecological management on PfL farms aligns with financial benefits, suggesting that environmentally responsible farming can be economically viable.
In Table 1, the Pasture for Life GM for breeding sheep flocks is compared to the Farm Business Survey for England, while Table 2 compares the GM for suckler beef farms. Despite PfL farms keeping their cattle six months longer or more, the variable costs across all the systems were remarkably similar for PfL and FBS farms.
The Output from the PfL suckler beef farms is almost double that of the benchmarked FBS farms at £1,158/head for the average compared to £516 and £540 for the FBS averages for lowland and upland systems. The average GM/head for PfL beef finishers is £404, much higher than the FBS farms at an average of £238.
The research on Pasture for Life was carried out by the UK centre for Ecology and Hydrology (UKCEH), Lancaster University, Natural England, SRUC, and was led by Dr Lisa Norton of UKCEH. The project was funded by the Biotechnology and Biological Sciences Research Council (BBSRC), the Economic and Social Research Council, the Natural Environment Council, and Scottish Government.
The PfL is now looking to gather and produce enterprise costings data down to Net Margin level, to highlight differences in fixed costs between 100% pasture-fed farmers and conventional lamb and beef producers. This could further illuminate the financial advantages of the Pasture for Life approach, reinforcing its value in promoting ecological sustainability and delivering superior financial outcomes.
- The financial data in the study suggests that Pasture for Life (PfL) farms, with their sustainability-focused practices, have a more cost-efficient business model compared to Farm Business Survey (FBS) farms, as evidenced by lower variable costs in PfL farms at £21/head on average.
- The financial performance of PfL farms showcases that they are not only environmentally responsible but also financially viable, with PfL breeding sheep achieving Gross Margins (GM) as high as £106/head, surpassing the top FBS farmers' GM of £93/head.
