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Beyond the Bale : February March 2009
4 cost oF production HArd data driVEs FArM profits B By Fiona Conroy efore the drought, Jim Boyle of corindhap, south of Ballarat, with his wife Betty and daughters terri and Melissa, ran up to 15,000 Wurrook blood Merinos on their 1,430-hectare property, ‘Woodside’. numbers these days are closer to 10,000 head, and Betty, who was the driving force behind the farm records, passed away six months ago. Although terri, a Melbourne-based chartered accountant, has recently taken over the role of managing the farm’s financial records, it is the Victorian department of primary industries (dpi) that provides Jim with ongoing farm data to help him identify the key drivers of his farm’s productivity and profitability growth. Jim and more than 30 other farmers in the region receive this valuable data in exchange for participating in the Victorian dpi’s south West Farm Monitor project. Every cost, production figure and sale price from such farms are assessed by the dpi to produce an annual financial and production snapshot of beef, sheep and cropping farms in south-west Victoria. the report from the Farm Monitor project gives Jim and his family an array of figures – including cost of production, gross margins and return on equity – which are used to monitor business performance. “Each year i look at the figures and how we compare to the highest and lowest figures, and to the averages. i’m happy if we track along with the average, as extreme figures are usually the result of unusual farm circumstances,” Jim says. “during 2006-07, people who opted to feed breeding flocks and also had lower wool cuts ended up with a higher cost of production than people who opted to de-stock, but were better placed to get production back on track when conditions improved. “i’m equally cautious when i see a farm with an extremely low cost of production because we need to maintain our business and invest in technology to continually improve productivity and profitability.” Corindhap woolgrower Jim boyle with his daughters Melissa (left) and terri. As a member of the South West Farm Monitor Project, Victorian woolgrower Jim Boyle has had access to a range of annual farm performance benchmarks that help him steer a profitable course While Jim looks to the return-on-equity figure as the best measure of overall business performance, he is conscious that the farm’s cost of production – and that of other producers in the project – has been steadily rising year after year. “our country has a lot of rocks so we are limited to running sheep, which means we need to invest in the farm and pastures to continually improve productivity and profitability,” he says. “the improved pastures have allowed us to increase our stocking rate and reduced our reliance on bought-in feed. Having access to figures over the years has meant i’ve looked closely at everything we do, but there are some things you can’t skimp on.” ? the boyles’ strategies The Boyles have adopted a number of strategies to minimise costs and optimise their flock’s performance. Jim uses professional advice from the University of Melbourne’s Mackinnon Project in managing sheep worms, conducting fecal egg counts before drenching and a drench resistance test every three years. Combined with grazing management, the drench management program has cut drenches to a minimum, reduced dags and kept sheep healthy. An ongoing pasture renovation program, supported by the Woady Yaloak Catchment Project, has involved sowing perennial pastures based on phalaris and lucerne, which has increased dry matter production and feed quality, and reduced groundwater recharge. The pastures receive high rates of fertiliser based on soil-test results to maximise production, and one-third of the pastures are sprayed each year using the Timerite® Lambing takes place in spring, to match animal demand with pasture supply, and all sheep are shorn in July. Management operations are combined when sheep are yarded to minimise handling and make the best use of labour. program to reduce the impact of red-legged earth mites. February – March 2009 Beyond the Bale pHoto: BrAd collis
Dec 08 - Jan 09
April May 2009