Benchmarking key for farm success at GROWING SA
Benchmarking has long proved to be an integral part of a successful approach to farm business management for many livestock producers. It is a process whereby a farm business’ key financial and production data is compared across a number of years against other farms to identify opportunities for improvement within the business.
At the GROWING SA 2017 Conference at Hahndorf on Friday, August 11, I’ll be outlining how the majority of Holmes Sackett benchmarking clients participate as part of a group. Identifying and implementing farm profitability benchmarking and participating in a group are two of the most powerful tools a farm business owner has at their disposal.
We are confident of this because a recent review of our benchmarking clientele showed that the group of participants achieved on average a 1.7 percent higher return on investments managed than those who were not part of a group. It equates to an extra $85,000 of profit per farm for the average sized farm.
Each year Holmes Sackett produces our annual AgInsights publication which collates, analyses and interprets data for the industry and individual clients. At the conference, I will discuss what the key determinants of a profitable livestock enterprise are based on what I see through the Holmes Sackett benchmarking service.
Holmes Sackett benchmarks more than 150 farms per annum with more than $1.2 billion in assets under management in NSW, Vic, South East SA and Tas.
The benefits of benchmarking a livestock enterprise include gaining a better understanding of the financial and production parameters of the enterprise over time across a range of seasons and markets. It allows the owner to focus on the things that work for them to get the most out of their business.
I encourage producers who want to benchmark their operation to start in consultation with the service provider to make it as simple as possible. Understanding of a business is built up over time so there is no substitute for getting started.
Being very profitable at any enterprise is better than an enterprise mix. What is most profitable changes from year-to-year based on seasons and markets but this cannot be managed or predicted so there is no use focusing on it.
My top five tips for running a successful livestock enterprise are:
- Ensure livestock eat as much of what you grow as is economically possible
- Grow as much as you can with fertiliser
- Ensure livestock utilise and eat what you can grow using better genetics if you can
- Manage your costs by avoiding expenditure on things that don’t improve the bottom line
- Reinvest well
By following the above principles, a producer can develop a more profitable business. It may be considered boring but it is very effective.