Its vey common to hear how much risk there is in agriculture. I know I hear the phrase “farming is a risky business” fairly frequently. To some degree that’s true. There are risks with the weather and the markets. There are risks associated with production from diseases and pests. There are the risks working with machinery, animals and working in isolation.
However choosing to focus on the negative side of risk is also a risk. Choosing not to do something, simply as a reaction to a perceived level of risk might actually be the wrong thing to do for your business or for yourself.
Lets face it; risk is part of life! There are risks with everything we do. The way we manage those risks depends on our experiences, our knowledge of similar or past events. It includes an appreciation of the situation and a decision to way up the possible outcomes of that response. So risk management is something we all do!
In day-to-day life making risk management decisions needs to happen in our head, and often quite quickly! However for a business, making risk management decisions on the fly, often leads to missed opportunities or costly mistakes that time and money to correct.
So how do you look at risk? How can you plan for risks and develop a business structure that is robust enough to respond to risk and capitalize on opportunities that often come along?
One of the tools I find most useful comes from the work health and safety industry. Called a risk score calculator, its basically a way to plot the level of risk to an activity or an event.
The tool plots the Likelihood of something occurring.
There are five levels, from Almost Certain to Rare.
The way I use these levels is to look at the data I’ve collected on the business. Has it happened before, is it happening often, does it happen all the time? In my mind, that’s the whole point of collecting data!
The second step is to decide what are the consequences of an event happening? Is it Catastrophic – which if you prefer is an easy way to say if this occurs will someone die, or will huge losses occur? And then through Moderate to insignificant consequences.
When you determine that level it’s fairly straightforward to decide if the risk you are considering is extreme, high, medium or low.
Effectively using this tool helps you prioritize your actions and future plans. Extreme risks are the ones you need to fix straight away.
Quite simply you need to consider what can you change to lower that risk? Is it a change to the way you operate? Is it a physical change to infrastructure? Does it require you to invest in skills and training?
Setting priorities is a huge part of risk management. You can’t do everything at once! And while there are always jobs to do, some of them are probably less important and can wait a while.
I reckon the real value of using this tool comes from actually sitting down and having a rational and objective assessment of the situation. As I said previously, your data will help you decide if the situation is likely to occur or not. The consequences of the event help set its place on your list of priorities.
I’ve recently been working with a producer using this tool to evaluate the impact of weather extremes. Their farm data shows clearly rainfall is coming in more intense events and the periods between rainfall is growing.
The pasture data shows changes in growing days as well. That data shows that it is likely they can no longer rely on certain species of temperate pastures to finish cattle for their traditional market.
The consequence of that is major impact on the business. The risk to that business is rated as High. So we have been working to develop pastures that suit the changes recorded, with more sub tropical species introduced into the mix. We have also started focusing on alternative markets so that cattle hit the specifications.
These are all big business changes. But we are making them to respond to a clearly determined level of risk. More importantly with my clients, we have a set of priorities to focus on. In sitting down to discuss the ways to respond, we were able to look at opportunities and new directions before choosing the best option for this business.
It also highlights the importance of collecting good data. I like using data to drive innovation on farm. Responding to and lowering risk needs some innovative ideas! If your data can’t help with those decisions, then you really do need to rethink how you are operating.
Over the next month I’m visiting several new clients to look at their programs and offer some advice. One of my first questions will be how do you manage risk? You can be sure we will go through this exercise and work up a few priorities!
Don’t forget if you want a hand to help set your priority list in order or to look over the data you need, I’m always happy to come and ask the questions and get you going!
Every now and then I’m asked for some advice on new ways of feeding cattle. With the drought extending its impact across NSW, those requests are much more frequent. Most requests are generally pretty straightforward. But there are always one or two requests that need a bit more of a response beyond feeding rates and methods.
One of those more challenging requests for advice comes when people ask me about the benefit of feeding sprouted grain to cattle. You may have seen this system somewhere. It involves soaking grain on trays and allowing it then to sprout and grow for about 5 days. The sprouted grain is then taken off the trays and feed to cattle.
On the surface it seems like a pretty good way to feed cattle. Promoters of these systems will tell you that they can turn 1kg of grain into 6 to 9 kilograms of green feed. Again that sounds pretty impressive, and almost too good to be true. To make it seem even more exciting, you’ll probably be told it’s the cheapest way to feed cattle.
Well, the simple fact is, when something is too good to be true, there is generally a catch. And in the case of these sprouted grain systems, there are quite a few!
The first big catch comes in the form of the feed you are providing. Quite simply if you do sprout 9kgs of feed from 1kg of grain, you don’t actually have 9kgs of useable feed! Most of that weight is made up of water in the plant. And water has no nutritional value! There is no energy or protein in water.
In fact the Dry matter percentage (DM%) of most sprouted grains ranges from as low as 6% to 15%. So if you’ve produced 9kgs of spouted feed with a 15% Dry Matter, what your animals really get to eat is 1.35kgs of feed.
It’s not a lot of feed really! In fact all you’ve done is taken 1kg of feed and marginally increased the amount that you have to feed stock.
The second catch comes from the quality of the feed you have produced. Some very neat work by the QDPI on the use of sprouted grains summarized the research work done to compare shed sprouted grains, grasses and grain. The interesting thing comparing say sprouted barley against barley grain, apart from the spouted being so low in DM%, was that the Metabolisable Energy (ME) of the sprouted grain was lower than the cereal grain. Crude Protein % was a little higher in the spouted grain.
If you are wondering how that is a catch, its really quite simple. In a drought we are looking to provide energy to stock in the cheapest way. Feeds that are higher in energy are more useful to feed. To be economic in a feeding program its more ideal to provide higher or more energy dense feeds. This basically means you can feed smaller rations but still meet animal requirements.
Lower levels of energy mean you need to feed a little more. Combine that with the impact of low DM%, and the actual amount you need to physically feed each ay can become pretty significant.
I decided to compare this scenario through the NSW DPI Drought Feeds Calculator. To make it simple I decided to compare feeding 10 cows for a month on either sprouted grain or normal cereal grain with the addition of roughage for rumination.
To make it more relevant, I used the figures given to me by a producer who told me he buys grain to sprout for $70 /tn. I compared it to barley at $310 /tn, which is what one of my clients paid this week.
The amount and cost of feeding spouted grain (without the labor cost added) for 30 days to feed 10 cows can be seen in this summary
Basically to allow for the Dry Matter of the sprouted feed, you would need to grow just over 31kgs of feed per animal. That would cost you $2.18 / day and for a month you would need to spend around $650.
This compares to feeding grain. While the cost of feed barley is much higher (as per the quotes I’ve been given) it is in the long run a much cheaper option.
The first thing that should jump out when you look at these comparisons is the difference in the amount you need to feed. The difference of 4.8kgs of grain compared to 31kgs. This then translates into a cheaper daily cost per head, and a significant difference in your monthly feed bill!
However, the comparison needs to go a lot further. To feed grain you do need to consider how to introduce it, to feed it either in self-feeders or in troughs each day. There is some labor in feeding!
The QDPI work also considered the cost of labor to produce sprouted grain. The systems can be very labour intensive (although some systems are automated). However to make sprouted grain work there is a range of tasks from loading grain into the soaking solution, making the nutrients; outing grian into trays, checking growth, cleaning old trays out and then actually feeding the sprouts to the livestock!
The report suggested that it takes between 2 – 4 hours to produce 1,000kg of sprouted grain, which in reality is about 150 – 200kg of feed for cattle.
The cost of your time is a huge factor to include when considering these systems. Based on the sums I did earlier; 1,000kg of sprouted feed would meet the needs of about 32 adult dry cows. That’s a lot of time to feed a small number of animals.
Finally the report considered the actually cost of producing the sprouted grain. Most systems require a sizeable shed (which is often something you have to build first) and install the hydroponic system to sprout the grain. You’ll still need silos to store grain anyway. On top of this are the running costs as well as the cost of grain and considerations such as repairs and maintenance. The QDPI team calculated it costs around $92 to produce about 800kg of sprouts. On a dry matter basis, that’s $92 for 96kg DM.
That’s a pretty high figure to include in your comparisons!
I think its important to also ask if there is any difference in the performance of animals that are fed on sprouted grain compared to grain. If there were significant advantages, well I guess it would help explain the attraction of the system. Sadly it appears that there’s really no significant benefit from feeding sprouted grain.
So what does it mean! Feeding cattle is a costly, time consuming exercise. If its not planned well, costs quickly blow out! You need to choose a system that is cost efficient and provides the best balance of energy and protein without incurring huge costs. Its better to fed less of higher quality than more of average quality. Equally important is not spending a lot of time and effort producing a product that really offers no nutritional advantage!
Droughts are tiring and difficult. Checking cattle, assessing feed, moving stock, checking water, well you know the things you need to do every day. I don’t think adding 2 to 4 hours work into the day to produce a product that is ultimately no better nutritionally but much more expensive makes much sense.
Perhaps for small numbers or for a specific purpose it may suit your program. But for the producer looking to efficiently feed a large number of cattle appropriately, I don’t think its an economic option.
Ultimately you need to run your numbers. Just remember that when you do, you need to take out the water component! Compare the feeds on their value and Dry Matter. Then you’ll know if it’s a system for you.
“How many cows should I be running?” “Is a higher stocking rate more profitable than a medium stocking rate?” Over the last few years, these are questions I’ve been asked on occasion. Following my recent post on the basics profit drivers, a few people have approached me with similar questions.
These are questions producers have grappled with for a long time. Where is the benchmark for profitable beef production? First of all, what does it cost to produce a kilogram of beef in Australia? The latest figures I’ve seen from ABARES suggest that in Southern Australia, the cost is around $1.74 and in Northern Australia it is $1.75
Looking a little further into the data, it becomes clear that herds with small numbers are much more impacted on by costs associated with production. In southern Australia, herds with less than 100 head don’t produce enough beef to cover the costs associated with the business. Herds over 200 head are slightly more marginal. Often they break even because the business model relies on unpaid family labor!
Moving over 400 head is where the operations seem to start to become less marginal and more profitable. In northern Australia, the figures seem to be similar, with herds around the 400 – 1600 mark relying on the unpaid labor to get through and over that 1600 mark the systems become more profitable.
There is no doubt that higher numbers have a key influence on profit. It’s very hard to capture economies of scale with a small operation. However, its important to look beyond the simple argument that more cows means more profits. Increasing numbers needs to be considered fairly carefully.
I have been looking at some work on the relationship between stocking rate and profitability conducted in Queensland. These have been very interesting to read. The studies have looked at the relationship between stocking rate and gross margin for growing enterprises and for breeding programs.
The key findings from the studies include:
- Increasing stocking rate does lead to an increase in production per hectare
- However this increase is offset by lower production per head
- There is a point where increased numbers will not increase production per hectare and may actually reduce production levels
- Lower production levels per animal will lead to price reductions for fat or MSA compliance. These often reduce any increase in gross margin achieved through the higher numbers.
- Increased stocking rates increase the demand for supplements and lengthen the time period of drought feeding
- Breeding herds tend to be less efficient with lower conception rates, lower weaning rates and lighter cull cow weights
From this work it appears that increasing stocking rates to high levels offers only short-term increases in profitability. In my own experiences with producers who have pushed their stocking rates to high levels, it is a strategy that seems to increase risk to uncomfortable levels.
By that I mean increasing the risk of seasonal conditions impacting more swiftly and to a greater degree. Putting pastures under high stocking rates puts more pressure on plants and plant root systems. Without a corresponding increase in fertilisers or plant nutrition, it doesn’t take long to see pastures become sparser, composition changes and animal performance decreases.
The change in composition is a significant issue. I have been working on the restoration of grazing properties in the south of NSW that have had a long history of high stocking rates and insufficient pasture nutrition. Much of my work now is associated with programs to eliminate invasive weeds and replant desirable pasture species.
Any increase in income from more animals has long been spent on worm control, supplementary feeds and now weed and pasture work.
There is no doubt there are times when you need to manipulate stocking rates for specific outcomes. I’ve recommended it with producers planning to renovate pastures, and we have used high levels to graze pastures right off in preparation for cultivation. But that has been a short term management strategy.
I think the numbers discussion needs to be treated with some caution, and more importantly some realistic objectives. I don’t think increasing numbers in the chase for more kilograms of beef per hectare is justified if it sees your animals struggle to meet production targets.
I can’t really justify the drop in conception rates for breeders or the drop in compliance rates for sale animals just to run a few more head. So if you wanted to increase stocking rate and maintain high animal performance, you’ll most likely need to increase your fertilizer program, or your use of supplements or even both. If it requires you to spend more to make that little bit more, is it really worth it?
When I am asked about the right number of animals, or what stocking rate to consider, I can’t give a definitive answer! What I can do is to work through the opportunities to use pastures efficiently and in a way that doesn’t compromise the long term viability of pastures, ensures high levels of animal production and doesn’t increase the ability to respond to changing seasonal conditions.
So when you do look at stocking rate, take the time to look beyond the raw numbers. If you are pushing stocking rate to the point where your animals are inefficient, or its costing you more in inputs than you are producing, you need to re-evaluate your program.
In the last few weeks I’ve read several articles and discussions focused on beef production. Specifically I’ve been looking for ideas or thoughts that I can bring into practice with my clients this year. After all, my job is to work with producers to find better ways and more efficient ways to produce beef and make money.
One of the first articles I came across highlighted the huge difference between profitable beef producers and the majority of the industry. This article from Beef Central, suggests that only 2 in 10 producers is actually making money. Having read that, I was more struck by the fact this isn’t really news to me.
For some years now it has been clear that the large majority of producers are not making nearly enough money to operate a profitable business. It also seems that there really isn’t anything new in the way that the profitable operators are conducting their business. In fact the profitable producers are focused on their practices on farm to producer kilograms of red beef efficiently and profitably.
So what is everyone else focusing on? It seems the focus for the less profitable operators is on the peripheral things. For some time I have been following an on line breed discussion. The discussion is driven by participants desire to be more profitable. However rather than sharing ideas to implement on farm or in the business, the discussion is now around issues that don’t really make money.
These issues include; why does “no one want to buy cattle from our breed?” “why do people overlook us in the sale yard” “we can’t advertise the same way the big breed societies do”. I actually find reading these points a little disheartening.
It gets worse when the discussion moves towards more defensive positions. These things include “well we had a good success in the show ring”, “our carcase competition results are always very good” “people say my cattle are great”.
Its generally about then that I stop reading and go away a bit depressed. In 24 years of judging carcase competitions, I’ve never actually met anyone who has been paid because of the results of a single animal in a carcase competition. It seems a very weak argument to put forward when discussing ideas to change and be more profitable.
Finally in one of the rural newspapers I read an article by an older cattleman who wrote about his work over many years, crossbreeding animals, and his focus on feed efficiency. While these are both very important traits, I was a bit skeptical when it also suggested processors need to change their specifications to suit cattle producers. I’m not really sure that any other business would think it’s a valid point to tell the customer to change what they want to suit the producer!
So what does this really mean? I think it means many people are focusing on peripheral issues that are not the primary driver for business profitability.
In my books a profitable beef herd is a highly fertile herd. It must have not only high conception rates, it also needs to achieve those conception rates within a defined joining period. For many herds this really should be within 6 to 9 weeks.
Those cows should then be able to actually calve and rear that calve through to weaning. And then be rejoined in order to produce another calf in a 12 month period.
Having worked with many producers, across regions this is the crunch point for me. The producers who achieve these things with their cows are already achieving higher levels of productivity and profitability for their businesses.
The next key point is animal growth. Growth isn’t just genetics. It isn’t just nutrition. It is the combination of genetic selection. I think t be more specific, choosing cattle for your country! Choosing the genetics, the breed type and the animal type that suit the environment you live.
If you get that bit right you are already on the way to making nutritional management that much easier. After all if the cattle suit the country, your management should complement the animals ability to use your pastures efficiently. But if your cattle don’t suit the country because their maturity pattern isn’t quite correct, or for some other reason, you will have to spend more time juggling feed and cow condition to ensure they get into calf, rear that calf and that any progeny meet market specifications.
I know fertility and growth (from both genetics and nutrition) has a direct link to business profitability. Its pretty clear from lots of industry studies, the herds that produce more kilograms of beef per hectare are the more profitable herds.
What I don’t really get is if it is so clear, why do we ignore these areas to focus on the peripherals? I’d get it if a producer was ticking all the boxes in fertility, in growth, in nutritional management. If the were I would see that they were selecting animals for market specifications and selling tem to capture the value those animals are worth. In effect, if you tick all the boxes it opens up the peripherals to explore and extract a little more value.
I know some producers will be defensive when they read this. I’ve heard it in comments such as “my cattle are fertile” “Its a very fertile breed”. My response is how do you know? I know not everyone pregnancy tests. I know that not everyone selects for females that go into calf early in the joining period. I know that many cows are joined for longer than 3.5 months.
So what does it really mean? This year I’m challenging all of my clients, old and new to look at the basics objectively and honestly. To make sure we are ticking the boxes. The peripherals that distract many in the industry won’t play a part in our decisions until we get the boxes ticked. I’m actually excited by this! I’m confident it will set my clients up to either become part of, or remain well within the profitable sector of the industry.
Don’t forget if you’d like to step up and take the challenge, I’d love to hear from you!
The first few weeks of 2018 have seen temperatures in eastern Australia rise to levels well above average. Hot temperatures challenge livestock as well as challenging people. With another month of summer still to come, its unlikely the heat will ease that much. So it’s worth taking some time to think about how you may help your livestock cope a little better.
Hot weather is an issue for livestock welfare and for livestock productivity. Cattle generally have a core body temperature of around 390C. There many be some slight fluctuations, but in general cows work pretty hard to maintain the core temperature.
As well as generating heat from their metabolism and from movement, environmental influences also impact on the cows temperature. Hot conditions either from air temperatures, solar radiation – and direct sunlight, relative humidity, air flow and the length of time hot conditions persist all impact on the heat load of cattle.
In general, cattle have developed strategies to off load excessive heat. However, when temperatures and humidity are very high it becomes much more difficult for cattle to cope. If cattle don’t have an opportunity to off load heat, they will start to become stressed and may die.
Cattle off load heat in various ways. Drinking cold water absorbs heat and helps lower the animal’s temperature. Heat can also be conducted from the animal to the ground by lying down. Standing in water is an obvious way of transferring heat.
The effect of shade on livestock is just as important. Work by Dairy Australia has shown that cows with access to shade receive 50% less solar radiation than exposed cattle. The movement of air through branches helps the transfer of heat from cattle to the atmosphere and will further reduce the heat load.
When cattle can access shade they tend to rest until the cooler parts of the day before grazing. I recently read some research that showed cattle prefer shade over water in hot conditions and they actually spend more time resting and less time chewing their cud as temperature rises.
Without shade cattle will camp close to dams and water supplies. They will often group together just to get some shade from their heard mates. While this does provide a little shade, it also means more heat absorption from the close contact with other animals. Where they can cattle will look for places where there may be a breeze to help provide some air flow and allow heat to be transferred from their bodies.
In practical terms, along with access to sufficient good quality water, providing cattle with access to shade is probably the most effective method of helping them cope with hot temperatures.
Trees are a more effective option to provide shade for livestock than artificial structures. I’ve spent some time talking to researchers who have shown that trees not only reduce radiation on cattle. They also reduce the air temperature under the tree by around 10.
While that seems to be only a small reduction, it does mean that the ground under the trees is also much cooler. Cows can lay in the shade and transfer heat more easily than if they were in an exposed paddock.
Trees also cool the air around them through a process known as evapotranspiration. This is the process of water evaporating from the leaves of the tree. As this occurs it helps reduce the amount of radiant energy left to war the air. In some ways trees act as a natural air conditioner!
However there is a catch! Evapotranspiration is much more effective when a tree is growing well ad in good health. There is plenty of data that shows single trees, and trees in poor health are much less effective in this process. There is some research that suggests that heavily compacted or poorly aerated soil will reduce the amount of evapotranspiration is 75% lower than in healthy trees. Quite simply the tree can’t absorb enough water from the soil for the process to happen.
So what does this mean in practical terms? I reckon the first is that natural shade is vital. I guess a single tree is better than nothing. But for a big mob of cattle a single tree wont really do much. Having a big group of stock crowding around a tree will place a lot more pressure on that tree. The soil is likely to be more compacted and reduce the ability of the tree to absorb the water it needs.
I really think that in periods of hot weather, your cattle will be much more able to off load heat if you grazed them in paddocks with plenty of trees. If they can spread out they will find their shade, and spend less time standing in dams, which often results in fouled water. (This has its own set of problems!)
Longer term you may even consider planting more trees. More trees in places will take pressure off those old single trees, and will give you and your cattle some useful options to cope with the hot days in the future.
Lastly, excessive movement creates heat and prevents cattle from finding ways to off load the heat they have accumulated. Moving or working cattle should be done early in the day or later in the afternoon. This lets your cattle find some shade when its hot and avoids building up unnecessary heat.
Its important not to forget that water consumption (even with plenty of shade) will be much higher in hot weather. So make sure you check your water supplies regularly to make sure there is enough good quality water for all your cattle!
The annual bull-selling season is a time when many people seem to ask questions about EBVs. The questions are not restricted to the usefulness of EBVs. They also include what do they mean, how do we actually use them and most frequently, why bother with them!
This year I was tagged on Facebook to make a comment on an American article that questioned EBVs, or as they are known in the US EPDs (which is Expected Progeny Differences). It was a pretty long article that questioned the science and mathematics that underpin the calculation of Breeding Values.
I had to read the article about three or four times to properly understand it! However two lines stood out for me. The first asked if EBVs were a tool or a toy. The suggestion was that EBVs were a dangerous toy being used unthinkingly and that it was a cult like behavior! The second was the summary line quoting a Tom Lasater, founder of the Beefmaster breed who said: "Breeding cattle is easy. The difficult part is keeping it easy!"
The article made me think a lot about my advice and the work I’ve done with producers for over 20 years. The comment about breeding cattle is easy, and the difficult part is keeping it easy is a good place to start.
Breeding cattle is easy! You can buy a bull and leave him with a group of cows all year. You don’t need to spend a lot, and you don’t really have to do much.
However, breeding cattle and making a profit is not so easy! Profit is driven in beef herds by the average price you receive and the kilograms of beef you produce per hectare. The average cost to produce a kilogram of beef in Southern Australia is $1.74 and in northern Australia its $1.75
So to be profitable, you can either increase your average price per kilogram, or reduce your costs or increase your kilograms of beef produced per hectare. Of these three options, the one with the greatest variation and the most potential to be manipulated in the kilograms of beef you produce per hectare.
Increasing your kilograms per hectare requires you to focus on two key areas. Nutrition and genetics. I actually find it hard to prioritise one over the other. In most situations, nutrition often limits the genetic potential of cattle. I have seen many herds with genetics that were capable of producing more kilograms of beef, but those genetics were never going to be expressed with the level of nutrition on offer.
Conversely genetics offer the opportunity to increase the ability of animals to grow faster, to be more muscular or more fertile or to have the traits that contribute to market compliance. It’s just as important to ensure your animals can fully utilize the nutrition you provide, so that investment in pastures, crops or feed isn’t wasted.
Increasing your production is a result of focused nutritional management and clear genetic improvement to capture the traits that help you produce cattle that suit your environment and your markets.
The difference between this and a basic, ‘simply put the bull out with the cows program’ is the simple option remains unfocussed. Cows calve when they calve. Weaners hit weights at varying times. Marketing is done ad hoc! Essentially this is a commodity production system where breeders have little opportunity to take advantage of market specifications or industry programs that can increase the average price per kilogram.
So in my mind, profitably breeding cattle isn’t simple! You need to manage the complexity of nutrition in varying seasons and localities. You need to consider market specifications as well as programs such as MSA that can increase your average price per kilogram. And you need to invest in genetics that will allow you to lift your production to be profitable.
The hardest thing with genetics is you can’t actually see them in an animal. When you look at a bull or a cow, you can see its physical appearance. It’s a direct result of its individual background, its nutrition and environment allowing it to express its genetics. Will that be the same in your business? How do you know? You have at best a guess that he may or may not suit your program.
The use of EBVs and particularly those that have high accuracies mean you have a better estimation of the genetic potential of that animal to contribute those traits into your herd. High accuracies mean that data on those genetics has been recorded on numerous programs and environments. This offers you a better insight into the genetic potential of an animal and therefore an opportunity to make a more informed selection.
I’ve never considered an EBV as a crystal ball. Its an estimation based on recordings and analysis. I would never consider them a toy! I use EBVs as a tool that help me select a number of bulls that would contribute the genetics my clients require to increase their production of beef per hectare. Once I have those bulls identified, I need to physically assess them. If the bull is unsound, or has a poor temperament or displays attributes unsuited to my client, I don’t recommend him!
So when I’m asked how useful are EBVs, I always answer that EBVs are a very useful tool. And that tool is to help refine your search for a sire down to a manageable number that you will then physically assess.
Breeding cattle is simple. Being a profitable cattle breeder takes a bit more work and focus. However if you want to be profitable there are tools to help make your job a bit easier. Every tool has a limitation, and if you know the limitations and use them as they are meant to be used, I reckon you can make breeding profitable cattle a bit easier than some people make them out to be!
Over the last few months I’ve been considering the role of benchmarks in business. I’ve always thought that benchmarks are important. However the question really is, why are benchmarks important?
The original use of the term benchmark related to marks stone masons would chisel into stone so that leveling rods could be placed onto the stone bench. The mark allowed the masons to return accurately each time the rod needed to be reused.
In business I think we use the term in slightly different ways. Ideally a benchmark is about setting a mark, or a measure on the factors that determine your production and profitability. They should be measures that can be repeated each year so that you can determine if your business is meeting your own goals.
Unfortunately I reckon too many people see benchmarking as a form of competition! I not sure where that impression came from. I guess some people are naturally competitive and try to be the best at everything.
Many producers work in groups to share their benchmarks and to learn from each other, so perhaps there are some people who just like to compete on everything!
So when I am asked about benchmarks, my first point is that it isn’t a competition with anyone!
My second point is that benchmarks should be yours. By that I mean, you need to set the marks in place that let you come back and assess your progress each year. They have to be realistic and reflect your business model. There’s no point trying to compare what you are doing to anyone else in the first instance. So if you are operating a breeding business, your benchmarks should focus on those areas around fertility. You should know:
- Your pregnancy rate for heifers, first calf heifers and cows.
- Calving spread over your calving period
- Weaning weights and numbers
There are more measures that you could record. However these will at the very least let you determine if your herd is operating efficiently.
If you are operating a finishing program can you record growth rates; compliance with specifications; age or weight at turn off?
There are quite simply plenty of measures that your business should have. I talk about this data as being useful to drive innovation. Quite simply it is using these results to fine-tune your management to improve and achieve better results you’re your business.
Setting some on farm benchmarks gives you a chance to take a critical look at your program. I know in my own business it’s very easy to get caught up in the cycle that is best described as “busy being busy!”
Having some set measures in place makes you stop and look at what you are doing. The chance to stop and look is critical. You really need to look at how you are spending your time, effort and money? If its not working as well as it should – i.e you are not hitting your benchmarks, then you can take control to correct the issues.
I reckon the third and most significant reason for using benchmarks is to give you a focal point to stop and take a critical look at the business. It’s difficult to argue with hard data. The data you collect gives you the information to reflect and ask critical questions.
This brings me back to my earlier points. In my mind, asking critical questions and looking at your progress each year, is fundamental to operating a successful beef business. Should you try and compare against other people? Well comparisons can be useful. They can help you see the potential for improvement or highlight areas of opportunity. But just making comparisons wont change anything! It’s nice to know what the national Cost of Production is and where yours relates to that. But if you don’t use that information to change your own practices, well I reckon you aren’t achieving anything for your business.
In the last few weeks I’ve been through an experience that has altered my view of succession plans. I’ll be honest and say that until recently, succession planning was something I didn’t think would directly impact on me. I think I really felt it was something that was important for farm families and businesses rather than in my own life.
However just recently, the vital importance of a succession plan for all businesses and organizations was bought home to me. In my involvement with the fire brigade, we have seen our Captain retire after some 40 years in that role. Almost at the same time our senior Deputy Captain retired on medical grounds.
These departures have had a profound change on the make up, and the atmosphere amongst the crew. The question of succession had never truly been openly discussed. While we knew retirements were coming, there was no clear plan as to how leadership would be handed over.
There were a lot of assumptions. A big assumption was I might have been appointed to lead the team. I know I made that assumption. There were assumptions that other long serving members would then be appointed to the deputy positions.
When it came down to it, none of those assumptions played out at all! It turned out not everyone shared the general assumptions. Other members wanted their opportunity to use their skills, or to strive for more responsibility. And that is not necessarily a bad thing! Opportunities do come and its important to grab the chance when it appears.
However this process highlighted some real issues that I reckon exist in any organsiation, business or family. The first is that assumptions can’t be relied on. You have no idea what could be around the corner for you or any one else!
Secondly, I’ve learnt we all have different motivations and desires. Just because groups of people all work together, it doesn’t mean they all want the same thing. If you don’t know what your family members, your partners or even the staff within your business want for their future, you could suddenly find your comfortable assumptions are completely wrong.
I found myself wrong footed in this experience. My assumptions about succession and my role in the organsiation were completely wrong. I also discovered that people had different motivations and expectations about their positions and the contributions they wanted to make to my own.
Again, this is not necessarily a bad thing. But I wish now I had of known that before embarking on a process that ended up being, quite frankly, suprising, disappointing and painful!
I’ve also wondered about when do we actually hand leadership over. I saw a very interesting article this week that said only 49% of mid west farmers in the US have actually identified a successor. Around 15% have no intention of retiring. The Australian figures aren’t much different. Only 54% of farm businesses have a formal plan.
My own experience isn’t really that different. There was no formal plan to follow when the leader of the crew decided to retire. For the past 10 years retirement had been mentioned, but no one was game to talk about handing the leadership to another person before retirement. No one had factored into their assumptions what would happen the chosen successor became ill, or didn’t actually want the role. And no one was really prepared for younger members to want their contribution to be greater.
The experience I’ve been through has shown that apparently stable organsiations are actually quite brittle. The stress of change combined with the transitions of leadership, leave people feeling everything from resentment and anger to, acceptance or apathy. Some people may never get over the change.
So if this can happen in an organisition with a formal structure, how much more difficult will it be in your farm or your business? How great will the pain, anger, frustration be if the assumptions your family have found comfort in for years actually turn out to be completely wrong? I can’t imagine it.
I don’t think a succession plan means you are being forced out or into retirement! It means you need to work with your family or your team to plan what is best for you all. To forget the assumptions and be honest and respectful of each others, needs, wants, desires and motivations. I know that isn’t going to be a necessarily an easy process. But, you can believe me, it might help avoid the painful shock when the assumptions all break when change does come.
You don’t have to do this on your own either. There are some very understanding, professional people who can help you, your family and your business develop the right plan. If you do anything this week, its at least start the conversation with the family. Investigate the services of an advisor.
Don’t neglect this one!
After all we are all working to build and grow something together. You don’t want it ruined because there was no plan for the next phase!
I think pregnancy testing is one of the most powerful insights you can have into your breeding herd. I’ve been offering pregnancy testing for the past four years. In that time I’ve come to look at pregnancy testing as not just a service that I can offer. I’ve come to value and appreciate the opportunity testing offers to evaluate a lot of management strategies in each herd I visit.
So why preg test in the first place?
I do have producers who tell me they don’t need to preg test. The reasons vary. Some people won’t because the think its too expensive. Others because they feel their fertility levels are spot on and pregnancy testing wont do much to change their fertility. I’ve also had other people tell me they are yet to be convinced in the need to test.
So lets think about the reason why you would test. At the very basic level, pregnancy testing allows you to determine the number of calves you expect to be born each year. The profit of any beef herd is driven by the kilograms of beef produced per hectare. Having live calves on the ground to grow and sell directly influences profit.
Unlike a sheep flock where the ewe will grow a fleece that can at the least offset, and hopefully exceed the costs associated with her management and maintenance each year, you cant shear a cow! You can’t cover her costs in any other way unless you sell her or she produces a calf to grow and sell.
In my mind the first reason to test is to make plans based on the number of calves you expect. It also lets you assess the cows that are not contributing to the productivity and profitability of the business. The ones that are not pregnant and will consume feed that really should be offered to the productive females first!
So what about these excuses not to test? The first is that it’s too expensive. I know my testing rates per head are less than a cup of coffee. For that price you receive information that allows you to plan the year ahead, and to save a lot of feed on non-productive females.
I actually calculated a price to feed non-pregnant females recently using some oats and hay. Based on the NSW DPI Drought Feed Calculator, I worked out the cost of feeding a cow and calf. The results were really interesting.
Basically a 550kg cow with a calf at foot would eat 9.68kg of Dry matter a day. Based on the cost of grain and hay, this would cost you $2.16 / day or $65.00 a month. So in my head, spending less than $4.00 would allow you to save the cost of feeding a non-productive female.
More tellingly, you could choose to feed that non-productive female and sell her into the market at a slightly higher value. Either way, I reckon it’s still pretty cheap to test and a better way of making a decision than waiting until calving and seeing how many calves are on the ground.
What about the people who think their fertility is spot on?
I saw an interesting slide yesterday from another consultant. It said, 80% of farmers think they are in the top 20% for production. That may be true. Having tested a lot of cows now, I know that many people overestimate their fertility levels.
In my mind, fertility isn’t just cows in calf. It’s also about knowing when your cows went into calf.
Productive and profitable cows are cows that can repeatedly conceive, calve and rear a calf every 12 months. In practical terms this can be hard to achieve. With a cow’s pregnancy lasting for 282 days, it takes a cow in average condition around 40 days to return to oestrus. So there are really only about 2 heat cycles left in the year to go back in calf.
You can select for females that are more fertile. Basically by selecting the ones that go into calf earlier in the joining cycle. This not only means you hit the target of a calf every 12 months. It also means that her calves are born earlier, and will be heavier at weaning and at sale time. It also means your replacement females will be heavier at joining and more likely to go into calf and successfully rejoin next time around.
I reckon the opportunity to make these decisions and evaluate each cow on its fertility is incredibly powerful. Personally I love the opportunity to collect this data and talk at the crush about the options for management of dry cows, which heifers to select as replacements, and to discuss herd health strategies. In fact the chance to do this in the yards as the cows come through shapes and focuses many management decisions for the remainder of the year.
For me, the next two months will see me in yards all over NSW testing cows and planning to use the results to make some more money. If you are still tying to decide if you should test, all I can say is that one test is much cheaper and more powerful than a cup of coffee!!
Recently I judged a local shows commercial and stud cattle sections. I really enjoyed the chance to look at a range of cattle and to provide some comments about the animals I assessed. However on reading through the report of my judging in one of the major rural papers, I’m not sure my comments were heard as clearly as I thought I had made them!
If you believe the report, my judging was influenced as much by the recent hot, dry summer as anything else. This had apparently caused my to lean more towards Bos Indicus cattle than British breeds. Well if only it was that simple!
I can confidently say that weather doesn’t influence my judging or indeed change the criteria have in my mind for cattle! Climate and environment or the other hand, do play a role. I think a lot about suitability of a breed to an environment. But its not the first thing I think of!
I assess cattle for three key attributes. The first is that they must be structurally sound. When I talk about structure I am referring to the skeletal system of the animal; as well as other physical traits.
So first off, I look at the way the animal walks. If an animal can place its feet in line with each other, with no over stepping or under stepping by the hind feet, then I start to feel the structure of the legs, hips, and shoulders are acceptable. I then like to look at how the animal stands, and I have another look at the angel of the shoulders, and the way it stands with its hind feet and legs in a normal standing position.
Its then that I have a chance to decide if the animal is standing too low on its hind feet, or two high. Both of these are a result of legs that are either curved or too straight, and its something I may not have noticed when I was watching it walk. I also want to see if the hocks are bowed in outwards or inwards.
What I really want to determine is how sound is the animals feet legs and shoulders? Can it walk a long distance each day to graze and water, and will it be able to carry the weight of its body without causing it to have sore joints that could lead to swelling, lameness or arthritis.
I reckon these traits are important for the longevity of animals within your herd and contribute directly to your overall profitability. If you have cows that can conceive, calve and wean a calf every year that is the first part of profit. The second is to have cows that can do this up to 10 years old.
When I run the figures on herd profits, those that have cows that are fertile and staying in the herd because they can get about, look after themselves and a calf have a higher profit margin. That’s often because they are selling a few more surplus heifers, and the heifers they do retain for breeding are the select group of genetically and physically better heifers.
As part of my structural assessment I look closely at teats and the udder to make sure that the quarters are all even and the teats are well shaped to support a calf sucking. I also want to see that all four teats can be used and not left un-milked as this can contribute to mastitis, which is pretty painful for a cow and will result in lower productivity.
When I’m happy with structure I look for the traits that add to productivity and profitability. We are breeding cattle to produce red meat, so I will always select for muscle. I look at the shape of the animals, the width depth and length of each animal to determine its overall muscle volume. You can have muscle in females, and it wont reduce your fertility. So I select for it.
I also like to think about maturity pattern and frame size. Large frame later maturity females will naturally require more feed to achieve their body requirements for maintenance, let alone for reproduction and growth. Remember you can only grow so much pasture or put out so many supplements.
And if you want your animals to do well, you need to feed them properly. Large frame later maturity animals may mean you run less numbers in your herd, and so may impact on the total number of kilograms of beef you produce each year.
Whenever I assess cattle, temperament is my other key trait. I like cattle to have a quiet temperament. Aggressive or overly excitable cattle are both dangerous and less productive; due to the impact temperament has on eating quality.
Ideally, my preferred animals are those that are structurally sound, well grown, well-muscled females. I prefer them to be moderate maturity and quiet temperament.
Ultimately I prefer them to suit the country and environment and to suit their target markets in both size and breed.
If I can help my clients have a breeding herd like that, I’m very happy. And when I’m judging I’ll always try and select those females first, regardless of the weather on the day!
- How do you prioritise risk?
- Water has no nutritional value!
- Profit - is it a numbers game?
- Are you focused on the basics or the peripherals of profit?
- Shade for your cattle
- How useful are EBVs?
- Using benchmarks in your business
- What the fire brigade taught me about succession plans
- Pregnancy testing - Less costly than a cup of coffee
- What do I look for in cattle?
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