HCR Law Events

20 November 2020

Why E.C Drummond is investing in agri tech

The Drummond family has been farming in Herefordshire since 1956. Today, E.C Drummond is based around poultry production, soft fruit growing, and arable and potato enterprises.

Their vision is to operate a family-based and sustainable agri-business that provides solids returns for future generations to continue in the farming sector. To help achieve this, the family has been investing in agri tech.

Matt Hayes, Partner and Head of Real Estate and our Hereford Office, and Mary Wathen, Partner and Head of Agricultural Property, spoke to Ben Drummond, one of the E.C Drummond’s directors to find out more about where they’ve been investing and why.

Investment in arable agri tech

When it comes to the arable side of the business, E.C Drummond is investing two areas.

The first is variable rate applications of chemicals and fertilisers. This technology is well-advanced and uses GPS technology to apply inputs on the soil.

Ben says the business is doing this for two reasons. Firstly, to save costs by not over-applying. Secondly, for environmental reasons because they are increasingly looking to improve their environmental credentials as a business.

E.C Drummond has been using yield mapping for a while, but the technology has improved dramatically in the past two years. They use a digital platform called Omnia, which is able to identify good performance and bad performance within a field and also looks at pH levels and other important factors. They are now actively using the data they collect and are finding it really helpful for planning and mapping crops to improve crop yields.

Investment in soft fruit agri tech

In the soft fruit part of the business, E.C Drummond has been looking at robotics for strawberry harvesting.

The key drivers for them are the increasing labour costs combined with the availability of labour – they are finding it harder to fill the picking roles than they used to. He says they are constantly asking how to improve productivity from the same number or fewer people. They consider lean management daily and how they can streamline their processes. Robotics and other tech clearly have a part to play.

They had a prototype robot from Belgium with them in the 2019 strawberry season. Ben says that by the end of the season, the prototype was able to move up and down the field and pick strawberries, albeit very slowly. They trial around 200 varieties of strawberries a year on the farm and they are now starting to select varieties that will be best suited to being picked by a robot.

He estimates it will be around three years before the technology is commercially viable for their farm but strongly believes that the implementation and use of this kind of technology will really advance as the living wage goes up. This in turn will make it more cost effective for them to invest in this type of technology.

The automation will not just stop at the harvesting of strawberries, they are also looking at the packaging process. There are already good solutions available and in use in other businesses. However, they only operate in their strawberry warehouse seven months of the year, so the costs don’t yet make sense.

The Brexit and Covid-19 factors

Brexit remains the big and – to a certain extent – unanswered question. Ben says he is not as concerned as he was 12 months ago, but he knows they will need to adapt their business to whatever system Brexit brings.

Twelve months ago, Ben says foreign workers were very reluctant to come to this country as it was not very attractive. They did not feel welcome and the pound was not very strong.

Covid-19 actually helped this, as people have found there are limited job opportunities in their own countries, so they have come to the UK. Indeed, they have seen a bounce back in labour over the summer of 2020.

Covid-19 has also changed the business in other ways. They had always picked in teams of 40, with one start and one finish time. This year, they have been running in bubbles of six and staggering the start times. They will continue with this as it proved more productive.

During the first lockdown, Ben said it was interesting to see that there was more consistency in people’s shopping habits across the week rather than a burst over the weekend. For the first time they have seen supermarkets’ planning data, which showed sales indications to be nearly 95% accurate.

Key questions to ask before you invest in agri tech

We finished by asking Ben the key questions any farm business considering investment in agri tech should think about. He said two things were important.

Firstly that the business itself is sustainable so the technology is worth investing in. As an example, he said that for their strawberry business, water resource management is hugely important and vital for their sustainability. If they cannot get that right then the tech would not be worth the investment.

Assuming it is sustainable, it is vital to calculate the direct return on investment and the payback period before you invest.

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About the Author
Matthew Hayes, Partner, Head of Real Estate and Hereford Office

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Matt Hayes is a Hereford solicitor, specialising in real estate.

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