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Call: 07969 018 324

Email: chris.clark@nethergillassoc.co.uk

What We Do

Nethergill Associates is a business advice service established in 1993 and now specialises in farm and environmental business analysis.

With increasing concerns around climate change and biodiversity loss, there is a call for farming to restore, re-engage and protect nature, farming in a more regenerative way.

It is widely assumed that higher production levels will improve farm profitability, but this overlooks the critical role of the environment in supporting a farm business. As a result, nature has been viewed as an additional burden to be managed rather than integrated into the farming system. 

Farm businesses face various challenges: extreme weather, the rising costs, changes to future farm payment schemes and adjusting to new consumer demands. But research by: Nethergill Associates has shown that farm businesses can improve resilience by working in partnership with the environment: farming to Maximum Sustainable Output or MSO. 

What is MSO or Maximum Sustainable Output?

What is MSO or Maximum Sustainable Output?

There is a calculable point, the Maximum Sustainable Output, MSO or ‘sweet spot’, where a farm business will be at its most profitable and nature will be optimized. 

Farming to MSO is a farming approach based on recent studies showing how farm business profitability can be improved, while delivering a positive environmental impact. 

Our research of over 250 farm businesses shows that with high-input, high-output systems they will often experience less profit or are unable to break-even after support. If the correct balance between food production and environment is achieved, landscapes will deliver viable farm businesses without disadvantaging nature in any way. 

Concept of MSO 2023/4

How is the MSO calculated on each farm?

Whilst Nethergill Associates reviews all the financial data to produce a set of management accounts, it particularly reviews the variable and fixed costs and subdivides the variable costs into Productive Variable Costs (PVCs), working with nature, and Corrective Variable Costs (CVCs), substituting for nature. From these, using mathematical formulae the MSO can be calculated for each individual farm: the point at which the business is at maximum profitability and nature is optimised. 

The management accounting process also generates: 

  • Cash flows
  • The value of natural capital
  • Improvement trees 
  • Breakeven points
  • Energy balances
  • Financial leverage indicators 
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How is the MSO calculated on each farm?

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