When chatting with fellow farmers at social events, the two most common topics of conversation are the weather and the market.
And they are the two things in your business that are most out of your control.
Agriculture consultant Phil Holmes, Holmes & Co, said producers need to better understand their profit drivers.
These are your cost of production, your stocking rate, time of calving, turn-off weights, and genetics, to name a few.
Presenting at the Better Beef Conference in Bairnsdale, Mr Holmes provided attendees with a list of tips that will set their businesses out from the rest.
“You’ve got to understand your profit drivers, because you can’t improve what you don’t measure, and you’ve got to know what to measure,” Mr Holmes said.
He said financial literacy is another important component to any farmer’s repertoire.
“You’ve got to understand the language of money, you can’t run a business of any kind, especially agriculture, without it,” he said.
“So many people walk out of meetings with their accountants with no idea what they’ve been told.”
He said there are courses you can do to help with this.
You also have to know basic business principles, the main being return on assets.
“What operating return do you want from your farm business? One, two, 10 per cent?” he asked.
“My mob of farmers reckon entry level is four pc, and if you’re operating at anything less than that, you’re just mucking around.”
He said your ability to think critically is crucial.
“People often ask me what course their kids should do at university, and I tell them I don’t care if they go and do Greek classics, so long as the course teaches them to think critically,” he said.
“You don’t have to go and study ag to be a good farmer, you can learn all the ag stuff later.”
He said his mob don’t want anything to do with drought handouts from the government.
“Drought subsidies don’t work, they are detrimental to the future of the business involved and also the environment,” he said.
“But with the whole of New South Wales in bad shape at the moment, and the horrendous stories from producers on television, it tugs at the heartstrings of people, and in particular politicians, so you can’t really pass judgement on the plight of those poor people.”
He said they go nowhere near bull auctions.
“They’re terrible places, we get bulls under contract,” he said.
He said it’s important to demand evidence.
“Don’t take anything at face value, make sure you ask where the evidence is,” he said.
Joely Mitchell
Joely started her career at Stock & Land as a cadet journalist in 2016. She is now the editor of the paper.
Joely started her career at Stock & Land as a cadet journalist in 2016. She is now the editor of the paper.
