AgriCulture Live Podcast · Agricultural Recruitment Specialists

Rebekah 00:01

Welcome to AgriCulture Live. My name is Rebekah Shields. Don't go anywhere. You don't want to miss this. It's a great episode. We'll be diving deep into the theme of how do UK farmers go from value adding to wealth creating, which I'm sure will be of great interest to a lot of UK farmers out there. If you have any questions or comments, please post them in the chat box and we'll come to them when we can. So over to James. James, would you like to introduce yourself?

James 00:33

Well, yes, hello, Rebekah. Thank you very much for having me on AgriCulture Live. It's a great pleasure to be here. And uh, just a quick background on myself. I'm director of Siggs & Co. We're farm business consultants, which my wife and I founded on the 9th of August 1995, so we're approaching our 30th birthday.

Rebekah 00:55

Wow, that's excellent. So tell us about your background. How did you get into the agricultural industry and why James?

James 01:05

How did you get into the agricultural industry and why, James? Well, I come from a farming family. Both grandfathers were first generation farmers, but all tenant farmers at the time, really basically all of my, all of my farms, my family were tenant farmers, in fact my brother and I the first farmers I know to actually own the farm. But when I was young, having grown up with all this farming, my mother, my aunts, my grandmothers, they said don't go with the farming, there's no money. I know I wasn't to be persuaded. So I first I think I'll become an electrical engineer looked at all the options, even the lawyer, my sister's a judge and said no, that's it, because I'll be a land agent.

01:46

So I went off to College, read agricultural economics, got more and more interest in the farming side of it, ended up milking cows in Saudi Arabia after college, worked home for a bit, then managed a local farm. Then I joined BOCM Paul's as an agronomist. I couldn't see any real future in being a farm manager and they plucked me out of Kent, Sussex and Surrey, sent me off to Indonesia as an executive in a plantation company. There, 50,000 hectares of all palm, rubber, tea, coffee, cocoa, 12,000 employees. I knew nothing about it when I landed and did that for a bit and then got into consulting with the same company. When the company was sold, we formed Siggs & Co to take over the consulting business that we were doing and it's gone on from there.

Rebekah 02:36

So you own Siggs & Co, so tell us about the company and what it does.

James 02:42

Well, until 2018, all our work was done overseas. We've worked in about 30 countries advising and managing large farms with diverse crops and livestock, basically for multinationals like Unilever or very wealthy people, billionaires, that sort of thing. We've also done privatisation and development aid work. We got into farm plastic recycling. Not for very long. We had our own farm in North Devon 10 years which we ended up actually being running as an experimental farm for our own work we were doing overseas. So we got into no-till rotational grazing, complete diets, all that sort of thing. And then in 2018, sorry, we didn't want to do travelling all the time and we ended up doing more and more work in the south-east of England advising farmers on government schemes, soil nutrients and business planning and with our son Charlie joining us in the business, we're doing more and more work on regen and the related agronomy.

Rebekah 03:53

Okay, so what makes you guys stand out from your competitors?

James 04:00

Well, we're really happy. So, you know, not like Clarkson's Farm, who has a cheerful Charlie, we have the really cheerful Charlie, and people have called me Jolly James or Jamie or James, and I think that's because, you know, we're always looking forward towards the opportunity and sideways to see what the competitors are doing. That's really what we're looking at. We're looking to be positive about things and how things can exist in that situation and build on it and use people's strengths and their opportunities to say they are, so everyone can get the best out of it. You know we're working. We've always worked alongside our clients and working with them, rather than we're not trying to boss them, we're trying to work with them.

04:51

And I guess, because we've worked so long outside of the subsidized agricultural sector um, you know we've been disciplined with this is you have to look at everything on its merit, not just think, well, how well, how can I maximise my income from SFI? Which, if you can, it makes sense to maximise your income from SFI if that's taking you your farm in the route you want to go, but not just the farm for it. And then we also focus very much on the cost of production and you know the saying goes. Turnover is vanity, profit is sanity, cash flow is reality, and the real thing at the end of the day is we've got to have a net positive net cash flow, and that's what we're working on.

Rebekah 05:42

I love that saying. So today we're going to be talking about how UK farmers go from value adding to wealth creating and ultimately get the most out of their farms. So, just for people to understand, what is the difference between value adding and wealth creating and what do they mean?

James 06:01

Okay. Well, I think this all comes back down to. So many farmers we talk to are saying they feel they're on a hamster wheel. They're running faster and faster to get nowhere. It takes a lot of energy but there's nothing happening.

06:20

And this was really brought home, I thought, on the last series of Clarkson's Farm. I will refer a lot to Clarkson's Farm. Jeremy's taught us so much, and the team, Charlie and all the team. And when Charlie tells Jeremy and Caleb they made a profit. So Jeremy, they're like Jeremy rock down the pub, yippee. But of course there's no money to go down the pub because, as Charlie said, it's all got to be reinvested for the next crop, and this is where we're at.

06:47

So we're constantly having to borrow money to reinvest to produce a crop and what we're taking is basically the basic resources of our farms, which is the land, the sunlight, the water, the carbon in our brains sunlight, the water, the carbon in our brains and buying stuff which we then hope to add value to, be it fertilizers or cake. And I guess I was thinking about this in terms of like, in terms of livestock. This has been like this probably ever since we've had the empire, because I can remember my, you know my father saying happened. You know, when we fought the war we had cows. You fed them four pounds of imported cake per gallon and that's how you made money. We weren't taking anything off our farm and that's what we got. And I think then in the 70s, you know, when we suddenly upped the inputs we were putting into our arable crops, that went well, because can remember that the first year we went into using fungicides and growth regulars, we had amazing uplift in profit and crop. But after that it wasn't and we got on. We were then already on this thing. We had to dead stop applying all these inputs for fear that something you wouldn't get, the crop inputs, for fear that something you wouldn't get across.

08:06

And I think what we've got to get away from is, is not looking at just margins and properties, is to actually start saying what's our net cash flow for the year and how do we do? How do we get to that? And you know how we look at we have with every, every possible. Is it really necessary? What do you do about that? That sort of thing, again, is really more focused on what's my net cash flow, because that's where our profit comes from, rather than it's quite easy to sit and think well, you know, my farm value is going up. You know, for us when we have our farm, great, you know, yeah, the farm value is appreciated a lot over here, but until we sell it, we can't do anything with it. And you know it's a bit like owning a house. Most of us we own houses. You know our houses go up in value but they're not making us any wealthier. We think we're wealthy but we're not. So, it's just basically how we get its managing our business to make have a net positive cash flow.

Rebekah 09:02

Okay.

James 09:07

So, people often assume are UK farmers rich? Yeah Well, Rebekah, what are riches? In many ways, those in the farming industry are rich. Most of us enjoy our work, we find it interesting and we're always learning something. We work for ourselves, we work in a nice environment and we set our own hours. And if you want to take this to a street extreme, I suggest you listen to the Matt Bowley episode on the pasture pod. So he's taken it to an absolutely amazing business. They're working with, making good margins and taking their time.

09:46

But then, you know, if we look at the actual, the wealth that people are sitting on depends who we're looking at. You know, if we're looking at tenants, who now make up only 30 percent of the farmers because you know, when I was young it was 60, 70 percent with tenants uh, you know they asked that they're based on. Basically, their only wealth is in their livestock and their fixed assets, and very difficult for them to make them do that. Owner occupiers, yes, sitting on a big asset in terms of their land, but I mean historically, as a landlord, that asset was only making 2% per annum and now it's less than it. Just depends on you large farmers, small farmer. So, you know and you know, and what sector you're in you know. For example, it seems to be that you know pigs and poultry until I've been pretty consistently profitable. The dairy has been quite profitable, with ups and downs, but the arable and arable okay, that's been ups and downs, whereas the grazing livestock sector has been always very marginal in terms of making any profit.

10:58

So, whilst people are sitting on a big asset, you know you've in fact got clients say with a 300 acre farm, they're sitting on a big asset. You know you've in fact got clients saying, with a 300 acre farm, listening on four million but not making anything really, now saying your farm payment's gone. So you know this is this, is this is the, the where we have the truck we have, and then. So I think you know, yes, but it's happened. It's big practice of being having a farmer's been like having a FTSE 100 index share. You know you're getting 100 index share, you're getting increased value, but you're not getting any cash and it's moving away from. How do we get, how do we make more cash out of us? And then, in terms of wealth, who is wealthy? Obviously wealthy is Warren Buffett and Elon Musk, or compared to somebody else, it's everything's relative.

Rebekah 11:45

Of course. So, in terms of you've worked abroad. So how do UK farmers compare in terms of profitability to farms abroad?

James 11:56

Well, if you come back to, the most profitable form of farming is oil palm, and the oil palm and price of palm oil, along with the price of palm oil, along with the price of petroleum, basically determine the price of all the other agricultural commodities. And the thing about palm is that you put it's a tree crop, you produce it all the year round. All the energy requirements you need to process the crop come from the crop residues. The fertility in the crop is all returned to the field, so, in fact, your variable costs are basically just the cost of harvesting, and so it's always very, very, very profitable. And at the moment that's making probably 1,500, 2,000 pounds per annum per hectare. And that is then and this what is what drives the constant, constant expansion of the, of the area, of the industry, regardless of how you feel about the environmental impact of it. But given that China and India will continue to take all the palm oil, then this is going to carry on. So that side of it is. You know. That's where we are. Then, if you look at the states, 79% of what they call small farms have a net cash income of $4,000 per annum, out of which they've got to live and refinance what they're doing. So, they're not in a very good position, but it's quite interesting that 50% of farms in the US are part-time. So that's the thing. I'll come on to a bit later. I'd like to 65% of the family farms in the UK. In the US have a net cash income of $67,000 per annum, out of which, again, they've got to live and reinvest. So they're probably quite like you know, a lot of farmers here in the UK are at the moment, but, of course and in the US of course land prices keep increasing as well, because we've got the likes of Vance and co, who are running a website to encourage people to invest in farming, and there's constant drive to invest in farming.

14:10

Now I'd like to look at Brazil, which has come to be such a massive producer and influence on what happens in the rest of the world. It's difficult to get any sensible figures out of that, but land prices have doubled in the rest of the world. It's difficult to get any sensible figures out of that, but land prices have doubled in the last three years and in most of Brazil you're going to get two crops a year. Most of it's now done with no till and their uptake of biocontrol is amazing. It's dropping out of the chemical control, the use of biocontrol. So, it's that's interesting. So there again interesting. So there again. All these. They are more and more commodities coming out cheaper and cheaper, putting price on commodities everywhere. You know they're using beef, soya cereals, everything.

14:51

Looking at eastern Europe, the figures like you get I know is we. We for one stage we were running 16 000 hectares in Romania, um, and that was quite an eye-opener because our average field size was 300 acres. Our biggest field was 2 000 acres and putting a 300 horsepower tractor to work in that was rather different than the 300 horsepower tractor working on a five acre farming acre field in fervent, um. And so they're. They're sort of making net profits, large farm net profits, 20 on turnover, around about two to three hundred pounds a hectare. So they're making making very good money and in terms of lamp land prices that I have remaining French friend of mine who's bought a farm in Romania around about 1998 for $50 a hectare and it's probably worth $5,000 a hectare now.

15:47

Australia cropping farms were had a very good year before last but now they're back losing money and overall in Australia Australian farms are losing money at the moment. France is interesting average farm income 56,000 euros with a subject 35,000. So again, no one's making any real money out of farming at the moment. You know this is the average figure but of course you know there will be people at the top end making a lot of money, people at the bottom end maybe losing, losing money. So it's always looking at what are the, what are the winners doing?

16:24

Do this and we look at the UK. You look at the average. It's, apart from dairy pigs and poultry dairy pigs, poultry and horticulture every other sector is losing money on its agricultural activity in 2024 but making it up with diversification, subsidy and agri-environment schemes. As we know, the single farm payment has been slashed back to 7,200. So it's pretty tough and it's tough for everybody at the moment and basically driven by these big producers of palm oil, Brazil and Eastern Europe, and that's where we are. So we have to look at where we're gonna go with those and I guess the other impact we have also is the Chinese economy on what we're doing. The Chinese will just keep adapting, improving. The Chinese are the biggest sheep producers in the world, so a little upbeat in their sheep production is a big change, but the pork production is not, so you know. Ok, UK is about where we are. Sorry if I waffled on.

Rebekah 17:34

No, that's fine. So if you wanted to have the most profit, yeah, it's the basics of where we come from. Yeah. So, if you wanted to. You know students listening say where in the world would you go to have the most profitable farm?

James 17:59

Well, you'd probably go to Brazil, yeah. Eastern Europe. Or possibly you start looking at places like Serbia. There's some beautiful land in Serbia, yeah. Or else you start actually looking at massive opportunities in Africa.

Rebekah 18:19

Okay.

James 18:20

Actually people go there and do things there.

Rebekah 18:26

Okay, so in terms of what we're talking about. So how can UK farmers go from value adding to wealth creating? James?

James 18:42

I think what we have to look at. We've got basic resources, as I said before, which is land, sunlight, water, carbon and our brain and basically everything we sell off. The farm is a combination of that. So it's really just making the most of what you've got. And I think someone said to me someone said, what sort of farmer are you? And he said to me I'm a profitable farmer. I said, well, you know, you're peaked low, cheap. What can you do? I'm a profitable farmer. And perhaps are you peaked low, cheap, what the most? I'm a profitable farmer. And perhaps this is where we're going to say, well, actually, no, I'm not a peak farmer.

19:27

Another problem we end up we've got quite a lot of new farm, new, new, new newcomers into farming in our business and it's refreshing the way they look at it. They say, well, I've got resource, I bought my farm, okay, what am I going to do with it? You know I'm not thinking that I haven't been forever a dairy farmer or a beef farm, anything like you know I, I've got to do something. And so, they basically take and say, okay, what have I got? Okay, and how can I make the most of most of what I've got? That's really the thing. So, it's basically looking at your basic resources okay, what can I produce off the farm without any inputs for staff? And then after that, what, what, what, what. If I'm going to use an input, what am I going to get back from that input? Am I going to get more than I'm actually spending on it by a long way, in a multiple actually? And I think, um, when I think about this, the first thing I do is looking actually, what are people like you know the soil, carbon farming and so far over the years for doing? People like Jake freestone, um, Andrew Brewer, and it's quite fascinating how they've stripped their farm back. This is what we can produce from our farm with a minimum input and this is how we do it. And through that, you know they're focusing, they are generating cash and they're not tied into just generating. You know what do I need to buy? And they've got off the treadmill. What do I? I must keep buying this stuff to turn it over. That's really what I'm thinking, that's what you would say at that point, and so you know it comes down to the specifics of that.

21:11

Depends on your farm, but you know it will be things like looking at number one about all farms is how do I improve my soil biology? Because that's you know, I can't say I was guilty of this in 1978. That's it get on the fungicide, get all the fertilizer on it's magic. And I think I've come to realize over the last five or six years since reading David Marr Montgomery's book on soils and then Gabe Brown's book, dirt to Soil was a real what it was. He brings it all together. It's not all theory, it's what a farmer has done with minimal money to make money out of his farm and it covers all things, not just the soil but the marketing and succession, everything like that. So it's the thing on. That is it's a look around and see what is my farm, what can I produce with what I've got, with a minimum amount of inputs, I think, and then then work from there. I'm sorry I go around in circles but it is a bit circular yeah. .

Rebekah 22:17

Absolutely so, James you said earlier. I meant to ask you 50% of US farms are only part-time. Why is that?

James 22:24

Why is that? Well, because actually it's the same all over the lot of the world and you know, in Europe it would be similar and we have this thing in the UK. Oh, you know, you're a part-time farmer. You know, having been a part-time farmer myself always got very fed up with this. You know, being looked down because I I thought I was doing my job professionally, we had prize winning stock, I was winning signage competition.

22:48

Oh yeah, hang on, you're a part-time hobby farmer, whereas I guess everywhere else they're just regarded as being an essential part of the operating system. It's not lifestyle, it is lifestyle. But we're producing whatever we need to produce from land. And I guess, quite interestingly, you drive across the state, you see endless small farms which are part-time farms. And I guess why do we do it? Because probably we have a background in it. We like the lifestyle. We like the lifestyle, we like the fact of going and looking at our crops, our stock, whatever. So that's it. But we are an essential part of the business and part-time farming is a way for people to get into the business, because it's very difficult, unless you've got a dad or a wife who's going to give you a farm. How else do you get it, or it's going to go and work on an honorary? You know, I had a lot of money working in Saudi Arabia, which gave me something to get going but it is.

Rebekah 23:54

You know, that's where I was brilliant. Okay, so it is another step towards wealth creation, diversifying their income streams beyond the traditional farming practices, would you say well, looking back to this Rebekah, my grandparents diversified.

James 24:08

When they started, you know they were new entrants. Um, you know they did. They did all sorts of things. Really, you know, from ranging from one grandfather was first very early adopter of turkey production as Christmas turkeys, the others did cut flowers and bed and breakfast. My parents diversified we had always had a riding school, we had farm shop, or my uncle's diversity, diversifying all sorts of things.

24:36

So I think this, but I think, in terms of diversification, there's no magic thing. You know, if you want to get in a holiday, you're in the hospitality business, so you've got to like people and want to do it. There's no point. You know, your land agent comes, oh, convert your business, have a holiday cottage. You've got to manage the people, you've got to manage all the people come in. You've got to manage the cleaners, the turnaround, everything, everything like that, and so it can be a problem. But the real key on the terms of diversity is diversity of cropping or livestock, which I think is key because, again, you know, to get the most out of your soil, your land, your soil, water, carbon and sunshine, you need diversity in as much diversity as you can in what you're growing in the ground and on the ground. So diversity is an essential part of the growth creation.

Rebekah 25:34

OK, brilliant. So how do we attract more young people into the farming sector and make the industry more financially attractive to them?

James 25:43

First talk about the safety. This is the most dangerous industry having its factory and that has got to be taken. That has got to be resolved first, and then after that, a certain amount of it is part-time farming. There's got to be a recognition by county councils and other people that part-time farming is valuable and if you're applying for a council holding, that running it part-time is an option. And the chat, the sad thing is the council Devon county council is amalgamating all its all its council holding that fewer and fewer people can get into actual farming itself.

26:23

If you want to go farming, if not, then you have to find a way. And it was a very inspirational presentation, two pretty inspirational presentations on Monday by how Now Brown Cow I think it is how Now Brown Cow, which people got at Dairy Farming in Devon, and another young family who are farming on National Trust property in Devon. We've got it by partnership. So, if you want to get that way, If you want to get into the ancillary industries, then you've got to get training and it seems to be the only way forward is going to university. So yeah, and then from after that it comes up the usual way Patch money, pass money or match money.

27:04

So, you know you've got to save up the money, but all start off small scale. Again, there's lots of people doing it. Just look around and see what people are doing. Good part-time farmers that's what I'd say. Be a part-time farmer first, and the NFU should accept and lord these people rather than running them down all the time.

Rebekah 27:24

Absolutely. We need to support them as a country, don't we?

James 27:28

We do, and also the NFU needs to look at its publicity and stop moaning all the time, because it makes farming look such a negative industry for the whole country. My father was an NFU chairman.

Rebekah 27:42

So how important is recruiting right to ensure that farmers can build wealth?

James 27:48

Absolutely the key, because you're only as good as your people and you've got and I think you know we've got to look at things and tell you need the right people in the right places and they need to be motivated. And basically you know it's a specialist job. I mean, I've worked in large agribusiness companies where we had personal departments. But if you don't have a personal department, it's something you need to have professional help on and you also need to look at, you know, career structure and the fact that people aren't going to be with you all the time. So we will be progression and people will be. It will be people coming into your business and moving on, because you know they want to go and get other experience and do other things. So I think you know you've got it. You've got you've got to go to a professional on that.

Rebekah 28:43

So how can a farming business start from today? Who’ve made the decision we want to head towards wealth creation. What can they do?

James 28:48

What can they do? The first thing is to start looking around and get an idea of what your assets you have on your farm Again, it's your land, soil, water, sunshine and your brain, and that's it. And then start looking around and see what other people are doing in the space. There's so many good books you can read I get I will come back to Gabe Brown, because that is the point I think it gets. It's a farm of four farmers and after this, endless numbers of podcasts or YouTube things to do to do that, and you will find a lot of information there inside what you're do and then say, okay, well, what will my farm produce? Okay, if I put, did nothing. And then after that, well, how much more do I need to do to make it use more? And then something. And then the day is what's the bread turns in, turn out in terms of cash flow? You know it can cover all sorts of things no till min till, uh, rotational grazing, whatever. It just depends what happens on your own farm.

Rebekah 29:51

If you're a very small farm.

James 29:53

It might be saying well, how much more can I sell direct to consumer? That's big, you know, because the you know, I think, as John Kemp is always saying, you know, sell by the pounds, not by the ton, and it's looking at all of these sorts of things. But there's plenty of help out there, there's lots of inspiration.

Rebekah 30:11

Yeah, absolutely. It's all about educating ourselves, isn't it? At the end of the day?

James 30:16

It is, yes, it is, you know, and you know I have to. You know, my mind was a little bit closer. I only went to groundswell last year. Oh, this is a bit of hippie yeah, hippie thing, but in but in fact it was amazing. And there is so much things coming on. It's just opening your mind and saying things can be done differently. And I look at my neighbours here in those days who've opened their minds. It's mind-blowing, mind-blowing and they're happier and everything's happier. Stop the health care. And I can just do something in my head. They're making a lot more money. They're not spending anything.

Rebekah 30:50

Yeah, so we're coming to the end. Now, James, a question I ask every guest is what do you think is going to be the next big issue for agriculture going forward?

James 31:02

I think climate change is the biggest issue this year, really, um, because it’s just is going to respect the dynamics of what's produced, where, how and why, and you know, you know that that is. That is that is really um. You know it says but, and then then net zero. But the way I see this also is that, you know, moving to net zero, you know it means that you're going to move net zero. It means that, even moving to net zero, we have got to go back to the situation we were in probably 300 years ago, where the farms were producing everything.

31:37

They were producing our food, they were producing our energy, they were producing all our fibre, they were producing all of our building material. And so we're gonna have to go back to that. And so, whilst we may eat less meat, the land is having to produce up to produce the, the fibre of the building materials, for the energy and everything else we need. Because you know that that's how we're going to become. We're not going to get us all from um, so so for so forth, we may get all from, so you, if it's, who knows what's going to come? But you know, I think you know big challenges, not a challenge that farmers are going to be needed, but farming will be going back to what we were producing 200 or 300 years ago.

Rebekah 32:18

Great discussion, James. You've made some really, really interesting points there and I'm sure you've given our listeners and viewers lots to think about. Thank you everybody for watching and joining us today. And yes, thank you everybody for watching and joining us today. And, yep, thank you, James, keep following us. We've got some great new discussions coming up. In a couple of weeks we're going to talk about agricultural colleges and their role in getting more people into the farming sector. If you have got an interesting topic in agriculture that you would like to talk about, please get in contact with me via agricultural recruitment specialists, which is www.agriRS.com and if you would like to hear more on new issues and topics within the industry, please follow us on various channels, including Spotify, YouTube, apple just look up AgriCulture Live. So, thank you very much for joining us. James, would you like to say goodbye?

James 33:16

Oh well, I will say goodbye. Thanks very much for having me, everyone else and everyone else who's listening to this, great to be here, great to speak, thank you, thanks very much.

Rebekah 33:26

Thanks, James, goodbye.