Sheep and Beef Farm Profit – getting clear on the real deal

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Posted by Brendon Walsh on 8 December 2015

Several of our accepted on-farm practices are keeping many sheep and beef farmers in a state of low profit and lack of belief that they can generate any more profit than they are doing now. In fact these practices tend to be recommended to farmers with the belief that they are sound. However, there tends to be very little connection with long term use of these practices and the historically poor business results from farming that are keeping our farm businesses just off survival. Here are some examples:

  • Carrying animals for a long time to put more weight on them in the belief that they will reach a higher value at sale and therefore definitely be more profitable.
  • Animals must be finished. If animals “have” to be sold store it means the farmer has failed.
  • Animal numbers carried through the winter must be near “carrying capacity” as much as possible to ensure there are more animals to sell in the following season and to make the farm more valuable.
  • Productivity means increasing production.
  • Increased production means more profit.

Although some of these ideas may be true sometimes, there are not rules of thumb at all. They result from “income” thinking, not profit thinking. They are driven by the mistaken beliefs that more (apparent) income automatically equals more profit and take no account of an allocation of all farm working expenses as the value change of an animal is generated. Gross Margins and the like are inaccurate “profit” metrics and keep farmers in the production treadmill. Low pasture covers post winter almost eliminate the ability to capture the spring profit period. The concept of prime and store values above tend to be a pride thing as opposed to good business sense where the extraction of profitable value change from animals is the real key.

Those who understand true profit principles know that following these ideas keeps them generating low or no profit for years. There are ways and methods of getting clear on true profitability so that they can double, triple or even quadruple sheep and beef farm profits compared to historically “normal” years. Yes, this is not only possible, farmers are doing it right now!

Perhaps it is time to take a look behind our typical farm business results and discover the real deal.

If you are curious about how the GrowFARM® System can help sheep and beef farmers generate the profits they really want, contact me here.

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