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Despite the apparent increase in desire for alternative protein sources, global meat consumption has increased by 2% for sheep, and 1% for beef each year for the last two decades.

In 2017, Australia was the world’s third largest exporter of beef, and the largest exporter of sheep and goat meat (OECD-FAO, 2019). Free trade agreements with China, Japan, Korea, Peru and prospective agreements with the EU will only fuel the demand for Australian red meat products. We are manufacturers of high quality food with a reputation to uphold and ever-increasing demand to meet.

Although our market prospects are positive, large areas where our livestock are produced are facing extreme and variable weather conditions. Overall, land prices are increasing, with the median price of agricultural land compounding at 2.5% per annum over the last decade (Rabobank, 2018). As a result, we need to be able to maximise the output and profitability of agriculture in an environmentally and socially sustainable manner.

So how do we maximise output? Increase stocking rate? Buy more land? Increase fertiliser inputs?  Use more supplementary feed? All will increase outputs, but will it do so in a sustainable and profitable manner year on year? And once we make a change, how do we know what effect it has had? Has it increased output? And at what cost? And efficiency? And on the flip-side, is the lowest input system the most efficient or profitable? If we are not quantifying outputs, then the lowest input cost will always seem the least risky and most profitable.

In the same way that our industry bodies provide us with metrics around global meat consumption, export trends and changes in land prices, we can calculate our own for a given production system and use it over time to see how the business is performing.

“Benchmarking is often seen as a scary word, suggesting we compare ourselves to mates, neighbours, competitors. But think of it as a means of identifying the opportunities for growth and optimisation, rather than identifying the reasons a business is weak or inefficient.”

Start by benchmarking one production system in the farm, rather than the whole business. Weigh stock, record feed and animal health inputs, pasture growth and the area of the farm occupied, as well as the weight, age and value of sale stock. Calculate cost of production and the gross margin for the system. If a change needs to be made, make it, record and evaluate whether it was worthwhile.

Start by benchmarking one production system in the farm, rather than the whole business. Weigh stock, record feed and animal health inputs, pasture growth and the area of the farm occupied, as well as the weight, age and value of sale stock. Calculate cost of production and the gross margin for the system. If a change needs to be made, make it, record and evaluate whether it was worthwhile.

Advances in modern technology make it easy to capture performance data from our livestock production systems. Individual electronic Identification tags, Bluetooth tag readers, automated handlers and weigh crates are increasingly common on farm, and in many instances are capturing baseline animal performance data already. However, the key is to then take that data, interpret it, then use that information alongside other production parameters to gauge business unit performance.

Remote measurement of pasture production and quality, soil moisture and water utilisation are additional measures that technology can allow us to capture and use to determine the efficiency of production. Furthermore, it is now possible to measure the genetic potential of livestock in commercial herds/flocks and select for the traits we are interested in, and match bull/ram selection to the traits of our breeding females more optimally.

If you don’t have the equipment, infrastructure, or the capacity to manage and interpret data, then there are skilled livestock consultancy services to assist you. These service providers can aid in the implementation of technology, planning the traits and timing of recording, then assist you in making the appropriate management decisions once you have collected the production information.

I am not advocating we place pedometers on staff and determine the “number of labour unit steps per lamb weaned” or other such absurdities, but rather targeted, strict metrics around animal performance, labour efficiency and per hectare productivity. And at the end of the day, any on-farm production data is only as useful as the management decision you make with it. But if you don’t know where you are, where you are going, and how you are tracking on your journey, then how can you grow?

We are manufacturers of red meat and wool products. Any other manufacturing industry knows inputs, outputs and efficiencies. Dealing with animals and the uncertainties of nature does complicate the situation but shouldn’t mean we don’t measure anything at all. As the old adage says, “you can’t manage what you don’t measure”. The era of precision livestock management is here.

– Michael Wilkes

DISCLAIMER: The information contained in this document is given for the purpose of providing general information only, and while Thomas Elder Consulting (TEC) has exercised reasonable care, skill and diligence in its preparation, many factors (including environmental and seasonal) can impact its accuracy and currency. Accordingly, the information should not be relied upon under any circumstances and TEC assumes no liability for any loss consequently suffered. If you would like to speak to someone for tailored advice relating to any of the matters referred to in this document, please contact TEC.

Interested how Michael can help you achieve long term sustainability and profitability?

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