Key Performance Indicators as Predictors of Enterprise Gross Margin in English and Welsh Suckler Beef and Sheep Farms

A large proportion of the lowest annual farm profits in the United Kingdom in recent years comes from lowland and Less Favoured Area (LFA) beef and sheep farms. Benchmarking the performance of a business through routine data collection can provide the information needed to make changes to enterprise management and performance. Key performance indicators (KPIs) are globally recognised measures that can provide farmers with this capability. However, it is largely unknown if there are specific KPIs relating to livestock production that have a significant effect on financial performance. The aim of this study was to determine whether KPIs could be used as predictors of financial performance (gross margin, GM), on suckler beef and sheep farms in England and Wales. This was completed using data from the Farm Business Survey (FBS), which is the largest stratified financial survey of its kind in the UK. Following data extraction, multiple linear regression models were developed for four enterprise types: LFA suckler beef, lowland suckler beef, LFA ewe and lowland ewe. Several KPIs were significantly associated with gross margin per head in all enterprise types. KPIs that were positively associated with GM were measures of livestock productivity, which were lambs per breeding stock and calves per cow. The increased expenditure on concentrate feed had a significantly negative association within all enterprise types, except for LFA suckler beef enterprises, where cow mortality had the greatest significantly negative association. This is the first study to demonstrate the influence livestock production KPIs have on the financial performance of suckler beef and sheep enterprises in both England and Wales, highlighting the importance of routine data collection and benchmarking.