The biggest mistakes sheep and beef farmers make when trying to be profitable

Posted by Brendon Walsh on 29 April 2019

I’m going to let you in on the biggest mistakes sheep and beef farmers make when trying to be profitable.

Now I’m not here to judge anyone one how good a farmer they are or take anyone down. I want to help you become aware of what you can do to start creating profit more reliably and therefore have a strong business. These mistakes don’t result in spare cash and when you understand true profit, it’s easy to see why.

So, here we go!

The first mistake is not really a mistake. It’s a lack of awareness. It’s not understanding true profit, or just not knowing about it. If you don’t know, that’s fine, learn about it to give yourself a chance! Unfortunately, many choose to stay unaware when they come across the true profit concepts. Making this one means the other mistakes are irrelevant anyway!

Next mistake is having no plan for profit. In other words, winging it. This is because many farmers stick to old habits, as in “that’s how it’s always been done around here - I put the rams out on that date and sell my cattle on that date,” OR they follow what’s trendy. Often that’s about lifting production or having the best figures out of their mates at the pub. But they’re almost always deep down disappointed with their annual profit.

Another mistake is not having target pasture covers available for profit periods. Therefore, they are just not set up to make profit. They tend to just take whatever pasture cover they end up with as a RESULT of how they like to operate. You need to cause the pasture covers you want and therefore operate to make that happen. You must do it on purpose or you are chancing it. Good luck!

Next mistake is not fully feeding profit animals during profit periods. You need to fully feed during profit periods to achieve the greatest value change for the cost of the feed eaten by your animals. Fully feeding won’t happen when ideal target pasture covers are not achieved on purpose, or when the farmer just won’t fully feed their animals. When you less than fully feed profit animals you get less value change for the feed eaten, and therefore a higher percentage of the feed goes into maintenance. That’s more cost for no income!

Another mistake is having the wrong stocking rates for profit periods. They are usually too high when they should be lower, or too low when they should be higher. That means not enough quality feed to create profit or too much feed and therefore missed opportunities with the downstream effects of that. Also, it means you are out of synch with natural rhythms and profit making.

Next, we have profitable stock being carried well past the end of profit periods. In other words, overcooking one profit period to then pinch resources from the next one. Therefore, a lot of feed is eaten for little or no profit. A better opportunity for that feed could be either another profitable stock class or banking it for the next profit period. The biggest issue here is the belief that you have to have the highest stocking rate all year round to make profit, or that you have to eat all the grass that’s grown and not let the pasture covers get higher than traditionally accepted.

The final mistake is not managing the risk around the profit plan. That includes unhelpful pasture covers and stocking rates, not understanding markets, not having a solid plan in the first place, not understanding profit and not preparing for profit periods. Decisions are made too late or not at all, or you don’t see the hits coming.

Creating profit is a deliberate process i.e. it happens on purpose. If you don’t operate this way, you likely won’t make profit. It’s almost predictable. You either follow the system for true profit and create it, or you chance it and likely don’t. Which do you want?

For more information, go to the Growfarm store at http://www.growfarm.co.nz/download-free-ebook-7-reasons/ and download my free ebook - "7 reasons why sheep and beef farmers don’t make profit, and what you can do about it.” It’s a great start to your journey to profit and having a consistently strong farm business which contributes to a strong sheep and beef farming industry.