Former investment banker builds thriving farming business in Scotland
The big money from tech and banking is increasingly finding its way to agriculture. Some see it as a threat that agricultural land is falling out of the hands of ‘farmers’, but investor Jimmy Smith has become attached to the agricultural sector. With an extensive arable farm and an expanding layer flock, he is wildly enthusiastic about the returns and about his new lifestyle.
Jimmy Smith was a very successful investment banker for 40 years and made a fortune at it. That made it possible to buy 100 hectares of land in 2005 with 2 partners from their own resources for the production of Christmas trees. He sells around 150,000 trees per year under the brand name The Kilted Christmas Tree.
Half of the land is in Kinross, Scotland, while the other half is in Herefordshire, 600 km further south. In 2014, a neighbour offered 80 hectares of arable land. That land had not yet been registered in his name when a ‘for sale’ sign appeared on the adjacent 70-hectare plot. The sign changed to ‘sold’ the next day.
Growing grains
With that, Smith entered the grain-growing business, which in the early years was entirely managed by contractors. Because Jimmy’s son Cameron, who was still at agricultural college at the time, saw potential in this, the arable farming branch was gradually expanded to around 400 hectares: 200 hectares of spring barley, 100 hectares of winter wheat, 60 hectares of rapeseed and rental of 40 hectares to potato growers. “Potatoes offer a good return, but it is too difficult a crop that requires large investments. We are not going to start with that,” said Smith. Between 2014 and 2024, the tractor and machinery fleet was expanded and all machines are now present – purchased new and paid for in cash, just like the land.
Due to increasingly strict requirements from whisky malting companies – especially regarding variety purity – more and more spring barley has had to be diverted to the animal feed industry. “We are in a grain-producing region; there is rapid mixing of varieties, which means that malt quality and the additional premium are lost.”
A good idea
There were already contacts with poultry farmers, who suggested building a poultry shed to make better use of the 1,500 tonnes of grain. “On top of that, you get free manure – a scarce, valuable, and sought-after product in these parts of the country,” said Smith. One afternoon, father and son were standing in a plot with poor water management. “We’d be better off keeping chickens here,” they concluded. The 20-hectare plot would be allowed to have around 46,000 free-range hens, since 1 acre (0.4 hectare) is required per 1,000 animals.
For up to 40,000 hens, no strict environmental assessment is required under the IPPC directive. That is why Smith applied for permission for 39,999 birds. That became a house of 40×80 metres, 2 flocks of 16,000 next to each other, and one of 7,999 across it. Construction began 2 months after the permit application.
The most expensive hen house in the UK
In the UK, the basic unit is a flock, a group of 16,000 hens. All the conditions in the houses are adjusted accordingly. “Our choice drove up the construction costs enormously. We probably built the most expensive shed in the United Kingdom (the investment was just over €4.5 million).”
The henhouse is truly a beauty. It is surrounded by fencing, closed off with an electric gate, 2 silos per flock and, in addition, silos for 200 tonnes of storage of barley and rapeseed and the purchased soya, soya oil and premixes.
A real blunder…
The investment was partly high due to the large difference in the level of the plot. Some 50,000 tonnes of soil was moved twice, and a lot of money was invested in concrete. A real blunder was the water supply. According to a specialised company, there should be plenty of groundwater at a depth of approximately 130 metres. That water could also be used, via a 500kW heat pump, to heat the house and dry the manure.
Two drillings later, that all turned out to be wishful thinking. The water yield was less than 1 cubic meter per day – far too little for the hens that consume about 7 cubic meters per day. That explains why there are so many IBCs in front of the warehouse of the Christmas Tree company. There is sufficient water yield on that location. The IBCs are filled there and taken by tractor to the shed 1.5 km away. “We will be done with that in a few months. Then we will be connected to the municipal water supply. What it costs doesn’t really matter. The water supply is our biggest bottleneck.”
Good and bad times
A farm manager takes care of the work in the layer house. The first flock went almost without a hitch. The second didn’t. Christmas 2023, father and son had to take care of the hens during the illness of the farm manager and the death of her son. “We went from owner and manager to employees,” grins Jimmy. “There were protocols ready for what, where, when and how to do. But disaster never comes alone. We had a 40% mortality rate among the hens due to enteritis; that Christmas we did nothing but remove dead hens.” The cause turned out to be toxin formation as a result of insufficient cleaning of the feed and water lines. “Since then, we have been very careful about this. The water lines are now flushed daily”. The flock was culled at an early age of 60 weeks; the goal is to slaughter the hens after 89 weeks.
The current flock is doing very well. The H&N Brown hens achieved a laying percentage of 90.6 in the 71st week. Smith is aiming for a high egg weight, an average of 64 g. Half of the eggs fall into size class L, the rest into M.
Smith works with split feeding: a slightly different ration and quantity in the morning and evening. “In the morning the hens get 75 g with 16% protein. In the evening, 50 g with 10.6% protein. The hens remain calmer, and it reduces the feed costs by about €1 per 100 kgs compared to using an all-round feed.” The morning feed costs €34.10 per 100 kgs, while the evening feed €33.50. Two-thirds of the feed volume comes from our own grains, which is good for 39% of the purchase value. The purchased premixes and feedstuffs such as soya are good for 34% of the feed volume and 61% of the feed costs.
Permanent partnerships
Smith works with permanent partners who relieve him of his worries. The eggs go to Farmlay, an integration that facilitates companies – also financially – at the start. “We didn’t need that financial security, but we did need Farmlay’s knowledge of animals, production and sales. It supplies to Aldi and Lidl. Aldi advertises in Scotland with Farmlay eggs and that gives me a very good feeling.” According to Smith, Farmlay uses a fixed price for all suppliers. “That never causes any problems; the price is good.”
Because Farmlay works with H&N Brown, Smith chose to do the same. The equipment, consisting of Big Dutchman’s Natura Nova 284 aviaries with Prinzen packer, was also selected on Farmlay’s recommendation. Once a week, Smith runs the dry manure of the belts and stores it at another site. The supplementary feed and premixes are supplied by Harbro, one of the largest feed companies in the UK, which produces 900,000 tonnes of poultry and pig feed annually. “They have a lot of knowledge and completely relieve us of the ration calculations and the grinding and mixing,” said Smith.
A profitable business
The Scot sees plenty of opportunities and calculates sharply, in a way that is surprising. He was faced with the choice of further scaling up arable farming or scaling up in layers. “A hectare of arable farming costs around €22,000 in this region and yields around €1,800 in grains annually. If we expand by 2 flocks, we lose around €30,000 in grain yields. Those chickens have a turnover of €1.8 million a year. It’s easier to generate an income from that than from €35,000 in grain or rapeseed sales.”
A house for 32,000 free-range hens is already under construction at a new location. This shed measures 20×120 metres. Again, in collaboration with Farmlay, Harbro, H&N and Big Dutchman. This time the construction costs are considerably lower. Smith expects that he will not have to spend more than €3 million, which includes expanding the silo park at the first location with two 40-tonne silos. All feed will be ground and mixed there and transported with a brand-new trailer blower. “That way we reduce our costs considerably,” he said.
Smith is now a full-time farmer, active in arable farming, Christmas tree production, and layers, and is also the only grower in Scotland cultivating 10,000 peonies. “I got into agriculture in phases, and I notice that I really enjoy it. As an investment banker, you make decisions about large sums of money, but you never see the inside of the company you are doing business with. As a farmer, you can easily go and visit other farms. I do that a lot; most of the farmers are open about their ins and outs and that are real eye-openers. In the banking world, everything is shallow. Now that I’m a farmer, I have land. With that, you leave something behind that will last for a long time. And the older I get, the more I like that idea.”
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