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Specialist finance drives farming growth

Published: 25 June 2018

The natural ebb and flow of the typical farming business means planning for growth must be over the long term. As Yeovil dairy farmer Bill Turner discovered, that means finding financial support from a provider which shares this future vision.

Bill’s family has been farming the 530-acre Manor Farm for the past 98 years. Today, it boasts a 300-strong herd of Holstein Friesian dairy cows, but supports that by rearing calves for beef, producing eggs from its 2,800 free-range laying hens and harvesting crop from 100 acres of arable land.

The fact that the latest generation of Turners continues the family’s agricultural tradition is testament to a shared vision for the future. “My grandad bought the farm in 1920,” says Bill. “And I still get emotional that all my children are keen to carry on.”

Strength to thrive in testing times

This farming passion has helped the Turners ride through some challenging economic times. Bill points out that hard work alone has not been enough to get through these. “A long-term vision is at the heart of every business decision, because this is a sector that will always be in flux.”

The farm was one of many to be affected by bovine spongiform encephalopathy (BSE), which was followed immediately by an outbreak of tuberculosis (TB). The worst outbreak forced Bill to cull 55 of his high-yield cows, losing around £10,000 a month.

Bill also cites the challenge of recent milk price volatility. “At the lowest point, we were getting just 18.6 pence per litre for our milk – that put a lot of farmers out of production.” The difference between the Turners and some other farmers facing a similar position was twofold – their business had already begun diversifying, and it had funding support from AMC, which took a longer-term, flexible view of their challenges. The result was that, within a year, the business was back to full strength and the herd had expanded.

Discovering new income sources

The Turners have continued to invest in farming operations and recently added a 100-cubicle dairy unit. There’s further plans to upgrade the parlour and install another 50-cow shed later in 2018, but diversification has also been a key investment focus.

“Farmers are natural entrepreneurs,” says Bill, highlighting how other local farms grow reeds for thatching or make ice cream to increase revenue streams. “I’ve always known how important it is to diversify. I’m always looking over the hedge to spot opportunities.”

One opportunity didn’t even involve looking that far. “I had been thinking about converting the barns into letting properties for 30 years,” says Bill. “It means that if something like TB hits again, we would still have revenue coming in.”

Taking a strategic view of the development, Bill decided he would develop eight two- and three-bedroom barn conversions for letting. These would better match the commuting needs of people working in Yeovil and yield greater income than two or three larger properties.

Next on Bill’s list is converting the granary into two more rental properties. Further ahead, Bill hopes to buy another farm, having previously purchased the 90-acre farm next door.

An understanding finance provider

Bill says AMC has been on board for the duration of his plans. “Unlike a high street bank, where managers may have no agricultural business experience, my AMC manager understands the unique challenges of the sector.”

Right from the start, Bill has been able to have open, straightforward discussions about the risks and opportunities of his plans with AMC. “And that’s how it should be,” he says.

Jonathon Day, AMC’s Regional Agricultural Manager, says the initial request to buy the neighbouring farm seemed “quite a stretch”. However, closer examination of the application revealed the proposal to be a strong one.

When a TB outbreak put pressure on the farm’s income and affected its ability to service an existing bank loan, AMC was also able to help by offering to refinance. “Bill’s bank wasn’t as supportive as it might have been, so we stepped in with a refinancing package. During the big milk price dip in 2016-17, we also arranged a capital repayment holiday for Bill so that barn conversion work could carry on through that tough time.”

Importance of professional guidance

Bill knows he is a ‘hands on’ man, and prefers to leave more in-depth paperwork to financial consultant Graham Poulton, who puts together budgets and proposals on Bill’s behalf. “It means we can present a package to AMC that makes saying ‘yes’ so much easier,” Bill says.

“Everyone needs someone they can sit down at the table with to discuss any challenges and decide on their future direction. If you’re in an industry like ours, you just want to get on with it. That means having somebody to talk to who knows the sector and can help make your plans a reality. I have that through both Graham and Jonathon,” he concludes.

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