Rayner Reckons

Jul 17

Setting a few benchmarks

Posted on Friday, July 17, 2015

Do you have a benchmark for production?  How do your management practices sit with best practice or against similar operations?  These are the types of questions I'm often asked by producers.  And these are questions not just being asked by my clients, I often get them in general discussions at field days, the saleyards, pretty much anywhere where a few producers might be chatting.

So how do you compare against others?  Does it even matter?  Well I guess what matters is if you are operating a financial and environmentally sustainable enterprise.  If you are doing that I reckon it doesn't really matter what everyone else is doing!  

Having said that, for most producers I know, there is always scope to improve their management or their production systems in some way.  Benchmarks can be a really useful tool to make those improvements.  

When I mentioned this to someone this week, their response was how are benchmarks useful? I reckon one of the best responses is that to create a benchmark, you have to make the time to consider what is being measured and actually respond with some real data.  

The very fact that real data is required actually causes producers to start considering what is actually happening in their programs.  It is very easy to overlook parts of the enterprise - the little things if you like, that on their own don't seem that important.  But when you accumulate a few of those things, they can have a massive effect on the overall business.

I reckon comparing your performance against a benchmark gives you a chance to objectively measure where your program is heading.  The way this needs to be done however is not to think that a once only assessment will mean very much.  

The first time you compare yourself to a benchmark you are really only comparing yourself to a single point in time.  You might be on par with that point, you could be above it or below it.  Whichever way you compare, the first time is really just the starting point.

To get some value, and make useful decisions, you need to do some comparisons over a couple of years.  This will show if there is a trend up or down.  

Having said that, if there are some things that you identify as being well below the benchmark, its a chance to get in and try address those issues as quickly as you can!

The other question many producers ask sits around what do you benchmark yourself against?  There are plenty of people throwing around benchmarks and production levels.  How current are those levels, how realistic are they?  These are all things to consider.

Personally I am a little unsure of what the realistic measures are for the producers I work with.  And there seems to be a fair bit of variation in what people are doing.  So this July I decided to conduct a benchmarking survey of RaynerAg clients and producers who use RaynerAg for advice.  I have to say, its not a short survey!  But if I'm going to collect data that I can use to help producers and have some meaningful benchmarks, well it has to cover a few things.

So far I have had some useful responses.  I am getting much better picture of some general practices that we can all improve and a few useful trends on fertility that might provide some easy but effective strategies for breeders.  Keep watching this space over the next few months and I'll share some of the findings as I complete the analysis.  

If you haven't completed the survey and you'd like to be part of developing these benchmarks, please feel free to click on the link and complete the survey.  I reckon we are all going to get a few useful results from the exercise! 

Jun 23

Keeping out of the cold

Posted on Tuesday, June 23, 2015

How do you cope with cold weather?  Some people seem to cope better with cold weather.  After working in the New England region of NSW for many years, I don't mind the cold too much.  I find that I can always put on some extra clothes, find a pair of gloves and even resort to a fleece lined hat for those cold bleak days!  And on the days when it is too cold, wet or miserable to be outside, there are always things to do inside to stay out of the cold.

However, for your livestock, the cold is an entirely different matter.  Livestock are impacted by cold weather, and if cold conditions are accompanied by some rain and wind, the impacts can be fatal.

Many people think sheep are the animals that are the most susceptible to the impact of cold.  However cattle can be just as susceptible.  

Several years ago I was told by a producer about an experience where some cattle were imported from a station in north Queensland to the New England.  These cattle were brahmans just older than weaner age.  The day after they arrived a snow event occurred and sadly some animals couldn't cope and died.  

So cold conditions, wet weather, wind can all combine to have devastating impacts on your animals.  And unlike the northern hemisphere, bringing animals inside is not really possible in Australia.

Can livestock cope with cold weather?  The answer is they certainly can.  The process of rumination does help them cope, as the rumination process releases plenty of heat that helps the animal stay a bit warmer.  The other things that help animals cope are the condition that the animals are in.  Livestock in average or better fat scores will cope more easily than lean or low fat scored animals.  

Animals that are at risk are those that are in low condition. Young animals and older wake animals are also at risk, as are lactating animals or sheep fresh off shears.

So how can you help your animals cope with the cold?  There are a few things you can do.  These include:

  • Provide hay for your livestock.  Hay is slower to digest, which means the rumen will produce more heat as digestion occurs.  This is especially important when the paddock feed is limited.
  • Put animals in sheltered paddocks.  If you have ever been in a paddock sheltered by some trees you will know the difference in temperature, particularly getting out of the wind.  Grazing your stock in sheltered paddocks, with timber or protections that can reduce the wind chill will make a big difference to your animals.
  • Avoid importing livestock from environments that not as cold!  Livestock need some time to adjust to a new environment.  They may not eat the new pastures, may be unhappy after transport and may have had time to explore their new home in time to find the sheltered paddocks or places in the paddock.  Being hungry, cold and stressed places these animals at risk, and if they are young, weak or light in condition, the cold is a real threat.
  • Draft your herd into fat scores.  Its always good management to draft your herd so that you have them in similar weights and fat scores.  The low conditioned animals, and the lighter ones need to be given particular care at the best of times, but during cold, this care is particularly important.  These are the animals that should have first option for shelter and definitely need your attention.

Fortunately the cold weather in Australia doesn't last for too long.  Snow is an occasion and doesn't bury pastures for months on end.  The big risks are the cold windy days as cold fronts sweep up from the Antarctic.  I reckon we are also fortunate in knowing when these events are on the way, so there is time to plan ahead.  I reckon if cold is an issue for your stock, you need to think if you can help them cope more easily with hay and shelter.  And if you are thinking of purchasing or moving a few animals onto your place, I reckon if you can consider the traditional impact on cold and determine if it is the best time for your region and for your animals to do that movement.

If you're happy with all that, and you've helped your animals cope as well as they can, I reckon you've earned some time inside by the fire!

Jun 16

Where were you this time last month?

Posted on Tuesday, June 16, 2015

How much do you trust your memory?  I reckon most people would say they have a pretty good memory.  But can you remember what you were doing this time last week?  What about last month?  Now ask yourself if you remember everything about the last time you worked with your cattle.  Can you remember how many animals you saw; how many you treated; how many were below average in weight or fat score.  

I've been listening to a podcast series while I've been driving called Serial.  Its produced in the US by a journalist exploring the story of a young man arrested for the murder of his ex-girlfriend.  The podcast has explored the case and the evidence around the case.  There have been interviews with witnesses, the young man, the police.  Its been fascinating to listen to.  

What stands out for me, is how unreliable peoples memories actually are.  Where they were, what they did, who they talked to etc.  And these are not unimportant details!  These things are important to find the murderer of a young girl and to prove the innocence or guilt of another person.  That person could face the death penalty or life in prison.  So remembering things is important!

Yet in lots of cases, people weren't really sure of events.  They couldn't remember, or they assumed it sounded correct and so on. In any event it proves to me that we can't always trust our memories, especially with details that happen every day.

I started thinking about this following a few client visits this year.  A big part of my job is to help make better decisions regarding the herd and the way the herd is managed.  

In some cases, my clients weren't really sure of important details.  Details such as length of joining; number of cows in the herd; average turn off weights into the feedlot or the number of cows sold out of the herd for non pregnancy.  

Its not to say they didn't know the answers, its just that in a few cases, there was a little uncertainty. 

Uncertainty troubles me!  More and more in agriculture we need to find ways to be certain.  Either to prove the integrity of our food production systems; to prove compliance with market programs; or simply to prepare a budget so we forecast income and meet the bills as they come in!

Its often in the little things, these details, that opportunities exist for improvement.  Individually these opportunities may not be very large.  However the accumulation of these opportunities often results in a significant difference in production or in profitability.

The key to all this is your records.  How good are they?  Without good records, you are reduced to relying on your memory. And if you are still thinking about just what it was you did with your cows this time last month, you might feel your memory is a little bit unreliable.  The other downside with memory, is it is very hard to analyse your memory to identify trends or anomalies that might indicate a developing problem.

One of the keys in decision making, is to make an informed and timely decision.  This is so true in agriculture.  In your own business the best source of information will be your records.  If you can't look at them, question them or get some advice on what your records are indicating, then your decisions will never be as good as they should be!  

So my challenge to you is to think about the last time you worked with your cattle.  If you kept records and can be confident in what you did and saw, then think about if you can use those records to make good decisions for the management of those cows. If you didn't keep records and you're not entirely certain of what you did, do you have total faith in your decisions for the best management of your cows.  If thats the case, maybe its time t discuss with me the options for keeping records in your business.

Jun 11

Do your capabilities match your ambitions?

Posted on Thursday, June 11, 2015

In the last few weeks I have had four conversations with producers who are incredibly enthusiastic about a new plan.  The plans were all different of course, but the enthusiasm was very similar.  I love enthusiasm, and I am incredibly passionate about aiming for a goal.  But!  There are times when I do wonder, if the plan is realistic!

No doubt you have seen business coaches, life, coaches and other people sharing inspirational advice.  Its not uncommon to see them as a motivational quote.  You know the sort of thing, "Dream big" or "The only thing holding you back is yourself". There's nothing wrong with these motivations.  It is vital to aim at goals and work towards them.  

Having said that, dreams don't just happen! In a business, your ambitions are realised through hard work, through focussing on achieving targets, and on ensuring your capabilities meet your ambitions!

One of the discussions I had last week focussed on producing cattle to meet a certain market specification.  The specification was pretty tight for weight and fat.  Underpinning that requirement was the need for the cattle to be certified as PCAS.  The top price on offer was almost $1.00/kg carcase weight above the normal rate.  It was a really attractive option, and if you could produce cattle that met the certification requirements and more importantly hit the specification, the return was going to be significant.

However, there were a few issues.  the most easily resolved was gaining PCAS certification.  It required some paperwork and a bit of homework, but the effort involved was more than offset by the potential market opportunities.

The bigger issue was simply to do with the cattle that the producer owned, and the feeding regime the cattle were on. 

Quite simply the cattle were never going to hit the specification for weight and fat.  Most of them would have been too lean at the weight, and the grid discount for under finished cattle was pretty big.

At the same time the cattle were grazing a feed that was declining in quality, and were not gaining the weight needed to finish in time.  They really needed a supplement to get the best use from the feed, but the options for the producer are limited by the PCAS requirements and the availability of supplements.  

So there were a few things going wrong.  The cattle, the feed and the restrictions of the program meant that the ambition to produce to that market wasn't going to happen easily.  

The discussion I had with the producer was really interesting.  The conversation started with the disappointment that was felt by the producer over the whole process.  They felt they had wasted their time and there was some blame being levelled for that. Blame on themselves for wasting time and more interestingly, for listening to the wrong advice.  The comment was "I should have never listened to them.."  and "they said that.."

I'm not sure who these mysterious advisors are.  I have a sneaking suspicion that advice was given by a range of people, from neighbours, agents, articles in the paper and perhaps a drinking mate in the local pub!  

I have learnt that people listen with half an ear to things, often hearing what they want to hear.  If it is a way to get more money, or in this care to chase a more lucrative market, the listening is often filtered through this filter of "getting more money".

The other conversation that stood out this week was with a producers wanting to complain about a market price at auction for steers sent to a show.  The issue was a poor return and that it wasn't fair to see a low price for these animals after all the hard work that had been done to prepare them.  It was an interesting conversation!  Again, the issue was a bit more complex.  The steers in question were under weight, had little fat cover and weren't really ready for the market.  However the exhibitor had been told, that by preparing them and taking them to the show, the returns at the sale "shouldn't be too bad.."

That advice had come from someone who hadn't actually seen the exhibitors steers, didn't know the weight of the steers or even what they were going to be shown for.  Yet the exhibitor accepted their advice and as result had a disappointing experience as a result!  Again there was a lot of self blame for listening to bad advice and for asking the wrong people for input.

So what do you make of those experiences.  I guess there are a few things.  Firstly, if you are embarking on a new plan or working for an ambition you hold dearly, you need to be realistic about your capabilities.  Can you really achieve that outcome with the resources you currently have to hand?  Do your cattle really suit that market?  Are your pastures really up to that level of production?  Does that certification restrict you too much?

A more deeper question is what are you trying to achieve?  If you want to make more returns and better profits, is there another way, that uses your resources efficiently and effectively?  Can your ambitions and capabilities be more aligned in a different way?

I also have to ask, who are you getting advice from?  If you are getting advice from someone who doesn't know what they are talking about, then really, what do you expect?

Just owning cows isn't always a qualification!  Can your advisor explain the challenges and opportunities for your business. Have they looked at your animals and pastures?  Do they really understand your system?  Do they actually understand the market, or is it just pub talk?  So many people talk a lot of rubbish that they have half heard or over heard in the pub / cafe / saleyards.  

I reckon most people wouldn't make business decisions on gossip.  Equally I don't think you would ask for computer repair advice from a plumber!  So if you are looking for advice to help you match up your capabilities and your ambitions look for someone who actually can come and give you what you need.

Don't be afraid to invest in the right advice.  Part of the disappointment in the conversations I had this week was a level of regret for lost income, lost opportunity, and more importantly for lost time and resources.  Investing in the right advice at the right time would have made a big difference for both of these producers.  I reckon free advice isn't always good advice.  And when you lose money, you will always be further from your ambitions!


May 20

Did you really tweet that?

Posted on Wednesday, May 20, 2015

I have to admit I get excited when I talk to people about social media and using it in business.  When I say social media, most people seem to roll their eyes as if to say, whats the point, or suggest the only value in social media is to have an online gossip or waste time.

I reckon that is a big underestimation of the usefulness of social media, particularly in business.  A quick look at some of the numbers in Australia, suggest that of the people who have internet access, 60% have a Facebook account.  The average use of Facebook is about 4 times a day and most people use it every day.  Other social media tools like Twitter, Linkedin, YouTube and Trip Advisor all have significant use by Australians in all walks of life.

The simple fact is, we are an age where people expect to access information and a connection with trusted sources of that information immediately.  If it is sharing family pictures or searching for information on the weather or a place to eat, people are turning to social media to get that information.  

This is the opportunity to tap into that demand.  Smart businesses see social media as a way of connecting with their customers and potential customers in a way that has never really been an option in the past.  It is pretty obvious that people want to connect with businesses and products.  They like to see images and stories of business and products they support doing well in the marketplace.

The best social media strategies encourage clients and other people to engage with a business.  That engagement needs to lead to a recognition of the business as a 'go to' for information and ideas.  

Well, thats what I am trying to achieve with RaynerAg and I have been teaching businesses how to do this in their own social media programs.

What does surprise me is how little though people give to the things they post and share on social media.  I've seen all sorts of things from tweets that contain swear words, to nasty comments, negative observations or criticism of businesses or government policy.  It seems some people confuse their ability to share their thoughts with the the impact their thoughts might have on their businesses recognition as a 'go to' source of information and ideas.

I reckon it is very unlikely that people are going to go looking for advice or to support a product when they see a series of negative posts or comments.  

Many people think it is just common sense that you don't post negative material or comments.  Yet every day I see them on Twitter, Facebook or on other sites.  So I reckon there is a gap between common sense and what really happens!

Ideally when I am teaching businesses how to use social media as part of their brand awareness, I want them to see the excitement that comes from sharing ideas and information across a much broader range of people than they could access from traditional advertising.  I really hope they become businesses that develop a reputation for information that is trusted and useful.  More importantly I want to help businesses or individuals avoid posting something that makes me ask "Did you just tweet that?"

May 08

Getting paid for the value of your cattle

Posted on Friday, May 08, 2015

I'm often asked by producers for my ideas on ways to increase the income they receive for their cattle.  Getting a better return is something most people want from their cattle.  And along with the desire to make a better return, there is always some new idea or marketing strategy that someone wants to do because they have heard it will make them more money!

Sadly I don't think there is one simple scheme, breed or idea that will guarantee you will make more money!  In my experience the way to make money in cattle production is through a combination of work and focus.  And while most people work hard, the focus is often the area that is most lacking.

So what should you be focussing on?  The first thing is your market.  Australian beef markets are well defined.  If you are selling cattle to a feedlot or to an abattoir, both of these destinations can clearly describe what type of cattle they want to buy and they can say how much they are prepared to pay for those cattle.  

Despite these specifications being readily available, many people don't appreciate what a powerful tool they are in helping you make money.

Specifications provide you with target weights and fatness.  This helps you determine suitable growth paths on farm for your animals.  It means you can use your feed reserves and make grazing decisions that will direct your animals to a market end point.  This is the focus that many people need to have but often don't.

Sadly I often see people who put cattle into a market and those animals are overweight or over fat.  This creates a few problems.  Firstly the animals are out of specification, and so will be valued at a discounted level.  So instead of an optimum price per kilogram, it is sometime much lower than the animals deserve.  

Secondly it takes your feed resources, and therefore adds to the cost of producing those animals, to get them to the weight you sold them.  So not only are they worth less per kilogram, but you also wasted feed getting them to that point.  

I reckon a lot of people don't notice they are losing money.  The extra weight, even though it has a lower value, will mask the lower each animal has made.  So that producers often miss the fact their animals didn't receive the optimum price.

Focussing on a market specification, either for feedlots of for processing, helps set realistic work goals.  Decisions about grazing management, feeding programs and other tactical decisions become easier if you are working towards an end point. 

More importantly at a strategic level you can start examining your genetics and your herd.  Are your bulls helping you achieve the correct growth rates and level of fatness required by your target market?  Do you need to be selecting a different type of cow in the breeding herd?  

Are your pastures capable of supporting your growth program?

These are important decisions that can help you target your financial resources more effectively in the long term.  While in the short term you can focus on hitting a market specification that will return you the greatest return.

I recently worked with a client who was aiming for a specification for a feedlot.  The optimum price was for steers that were 400 - 449kg.  Over 450kg the price difference was 5c/kg lower.  Initially this didn't seem to bad, however we started to look at the feed resources we had to use.  The extra cost in this instance to get steers over 450kg, effectively worked out to be the equivalent of a 25c/kg discount!  We started to look at how we were growing those steers, and by aiming for an earlier turn off at the optimum weight we were able to save around $70/hd on the steers that normally would have been in the heavy category.  To wrap this story up in past years about 10 - 15 steers would always have been too heavy, so we saved around $1000 by making a few changes and staying more focused on the plan!

There is no doubt we had to work a little bit harder and change a few management practices.  However I reckon using resources more efficiently, and targeting a specification more closely, has helped realise better returns on farm.  

I reckon working with producers to be more focussed and efficient in their work programs has helped gain a better return for the clients I've worked with.  

Apr 16

What do you expect at the local show?

Posted on Thursday, April 16, 2015

I love agricultural shows!  I'm not really sure where that love came from.  I have an early memory of going to the Picton Show as a small child, and I remember seeing cattle being judged.  I'm certain they were Charolais because in my mind they were big white animals.  While Picton is now close to the outskirts of Sydney, the Royal Easter Show was too far for us to go to until I was much older.

As a school student my desire to be involved in agriculture led me towards the school cattle showing team. So much of my extra curricular activity involved preparing steers, and weekends away at local shows in the Southern Highlands, and finally taking steers to the Sydney Royal Easter Show.

Somewhere along the way, I made a switch from being an exhibitor and competitor in the showing, and became one of the organisers.  In my final year at university I was holding the position of Secretary of the Picton Show.  

When I moved to Glen Innes, I was a member of the show society and at one stage was responsible for the Prime Cattle Section and Feedlot Competition.

Now my involvement with shows is through my role as a Councillor of the Royal Agricultural Society of NSW.  So almost 25 years after this picture was taken I'm now helping to run the competitions that in many ways launched my career into agriculture.

So with that background and passion for agricultural shows, I am always interested in the comments and often criticisms that get levelled at shows.  I reckon a lot of it is unfair.  I am equally ready to admit there are always things to improve.  If you think something is perfect, then I reckon you aren't trying hard enough to progress.  

Today I saw some criticism on social media about local shows.  The comments ranged from the poor numbers of animals being exhibited, through to low prize money and lack of sponsors.  

This comes off a recent series of discussions by dairy industry representatives regarding farmer interaction and industry promotion that started in a blog, and spilled over to The Land.

So my question to people is what do you want from your show?

Shows initially were one of the only ways farmers could benchmark their production methods against their peers; to obtain expert advice and critique from judges and to learn from others new ways to go about their businesses. There certainly is nothing like competition to bring out the desire in individuals to do better!  

The reality is, industries change.  For many producers there are other ways that they can learn new techniques, can benchmark and measure their production systems.  Unlike the agricultural landscape of 50 years ago, access to experts is not restricted to a judge in a competition.  

Sadly this means some competitions decline or disappear.  And while that is sad, it is reflection of the direction of agricultural industries to move forward with technology and research.

The critics often want to say the problem is there should be more prize money and sponsorship on offer.  I think we would all like to have more money and sponsorship for our competitions!  Again, the challenge is to find businesses that can afford sponsorship and money to support competitions.  In local communities, small businesses can only afford so much on advertising and sponsorship.  

Often that money has to be spread across a lot of worthwhile community events, not just the show.  The reality is, does the show deserve more money than the local sporting teams, or to support local service clubs or even just to advertise business in traditional formats.
Having said that, its certainly not all doom and gloom!  Agricultural shows seem to respond to the changes in their industries in different ways.  New industries often find a way of promoting themselves into the area through local shows and establishing competitions.

Alpacas, utes, goats, young farmer challenges, are some of the more obvious competitions I can think of. More unusual ones include home brewing and wine making.

So I reckon the first thing is, if you don't think theres enough competition or focus on agriculture, why is that?  If you can recognise your area has a different focus on agriculture, and you want to see competition, than maybe joining the committee and helping arrange competition is a start.

I know some people feel committees are dominated by older established identities who don't like change.  I think that is an unfair thing to level at committees.  Many committees, and certainly every show society I have been a member of, has been welcoming and pleased to have new people becoming involved and sharing the work load!  The challenge is to join a committee and not expect to be running the show straight away!  

I also think the recent discussion regarding farmers expected to share industry messages and promote the industry to the broader community.  Its a bit of a tough one.  Producers who choose to compete are there for reasons that range from promotion of their operation to potential clients, not necessarily promotion to the broader population.  They are at a show to demonstrate or test their skills, ability or their knowledge.  

I reckon you have to focus on your reason for being there.  Yes interact with the public, and answer questions when you are asked.  Thats not just common sense, its also politeness.  But can you spend your time interacting with large numbers of peopled provide the messages that the industry wants shared with the community?  I don't think thats a realistic expectation to place on exhibitors or on a show society in general.

If an industry, like the dairy industry, or the red meat industry wants to share messages with the public, then it should be the role of the industries marketing and promotion bodies to do this.  Thats why they are funded through levies!  

The role of the show societies is to encourage those organisations to be part of local, regional or state hows, by providing the venues and assistance to share those messages.  But ultimately to expect a show committee or an exhibitor to do broader promotion is asking them to take on new roles, and potentially detract fro the roles they should be focussed on.

So what do you expect from your show?  I reckon if you are treating your show like an agricultural zoo, wanting to see examples of industries that may or may not exist in your community, then you are being unrealistic. If you are expecting big prize money on offer, but begrudge paying entry fees or offering to help find some sponsorship, you are being unrealistic.  If you expect a committee to offer competitions or events and then don't support them of contribute to them, then don't complain when those events are no longer conducted.  

I guess in short, we all expect a lot of things in agriculture.  Our local shows, our regional shows and our state shows, are a way of celebrating our industry and demonstrating the excitement that should exist every day in agriculture.  But the show can only celebrate these things if people are prepared to keep it relevant and to help shape the show in a way that celebrates the way agriculture is practiced in your local area.  

Apr 10

How often have you stopped and taken the time to consider your farming business?  If you can answer that question, then I reckon you're a member of a pretty small group of farmers nationally!  When most people stop to think about their farm as a business, its around tax time, completing a BAS statement or as part of financial discussions. 

Assessing your financial performance is not just important, its vital for your business.  But its not the only thing you need to be assessing.  Every farm is made up of systems that contribute to the level of production and the financial returns your system producers.  

These systems are the obvious ones such as the livestock your carry, the pastures and soils that you rely on, the infrastructure that supports your programs.  Less obvious are the systems that bring it all together, your management skills, as well as the specialist skills that you need to manage your livestock, your pastures and soils as well as the specialist marketing skills you need when you look to make a return from your production.

So how do you assess if your enterprise is running to its full potential?  
When you are making your assessment, how objective are you?
The four steers in this photograph are all the same age, and were all from the same property when this photograph was taken.  The variation between the four of these steers is obvious in the picture.  

However variation like this is common across the herd.  The flow on effect of that variation impacted on sale times, sale weights and income on the steer and surplus heifer sales.  It also impacted on joining weights and the conception rates recorded in the fixed time joining that was being followed.

One of the problems in rectifying this situation was the owner was so used to seeing the herd, the variation was no longer obvious.  The flow on effects were being ignored or not addressed correctly, instead the owner focussed on other areas to manage.

I reckon the problem is that most people are so used to seeing their operation every day, they lose their ability to see the variations, or to be objective about the strengths and weaknesses that exist in their systems, and in their farm as a whole.  When you can't identify your strengths or your weaknesses, it makes it very hard to capitalise on the opportunities that exist for you, or to prepare for the threats that may be coming.

One of the key roles of the RaynerAg business is to provide producers with an objective view of their program.  Helping reduce the variation in a program is one practical approach.  But its not just about working through the cow herd and taking out the extremes!

More importantly, I reckon its my role to help identify the strengths and weaknesses that impact on the whole business.  And then to work with the producer to come up with a plan to use the opportunities available to be more productive and profitable, and to be prepared for the threats that could be coming.

If I can help my clients take a more objective look at their business, and to do that on a regular basis, I reckon I've done a good days work!

So if you're part of the large group of Australian farmers that haven't had an objective look at your business in a while, why don't you get in touch?  I'll be happy to help you see the variation and work out ways to fix it.

Mar 17

Crossing into profit!

Posted on Tuesday, March 17, 2015

Last week I was part of a road trip with Shorthorn Beef, delivering several workshops on crossbreeding.  We were holding these workshops on properties in southern NSW and in Victoria.  The three places we visited were all running crossbreeding programs to target specific markets and to capture the advantages of hybrid vigour in their herds.

I reckon crossbreeding is a concept that many producers know of, and in many cases, are actually strong advocates for.  If you're a little unsure of what crossbreeding really means, I reckon its important to know what it actually is, before you implement a crossbreeding system in your herd. 

Crossbreeding uses two (or more breeds) to produce a calf that displays the attributes of both parents.  The impact of two breeds on that calf results in an expression of hybrid vigour, which means the progeny will perform to a greater degree when compared to straight breed animals. 

This extra performance is often seen in the important traits associated with beef production, such as improved weaning weights, improved growth rates and greater longevity in a herd.  

If you use crossbreed female in your breeding herd those traits also influence your fertility rate.

So there are positive benefits from crossbreeding!  If I needed to go a little further, one of the more obvious advantages of crossbreeding is to introduce new traits to your herd, such as adaptation to heat or pests, or to capture other production traits that are important to you and may take a long while to select for within a breed.

While crossbreeding systems offer these advantages, many people grow discouraged by crossbreeding.  I've wondered for a long time why that might be.  I reckon there are a few reasons.  Firstly, there are different strategies involved in crossbreeding.  The most simple is to use two breeds generating an F1 calf.  These calves display all the hybrid vigour effects and surplus females are always in demand for people wanting to use them in breeding herds.

In this simple system, there is a positive return from extra growth in the F1 progeny.  These extra kilograms result in an increase in gross margins when compared to the straight breed program.  

However the big increases start to occur when producers look to use crossbred females in the breeding program.  

When they do this, its very quickly apparent that the hybrid vigour effect in both the parent and the progeny result in increases across the range of production traits.  

The downside is, these systems need to be planned and followed in the joining program.  It seems that many people move away from crossbreeding systems because they forget to follow a plan, or they find difficulties in making the system work to their benefit.

So instead of using a crossbreeding system that allows you to have increased weaning weights, improved longevity in your herd and greater fertility in your cows, (both of which mean keeping less replacement heifers) many people step back from crossbreeding because they are frightened by a perception of complexity!  

Maybe the other concern is that people have dabbled with crossbreeding and have been disappointed by the results they have received.  I know of a few producers who have bought cheaper bulls to use over their second choice cows, "just to see what would happen".  While the progeny did grow well, the results weren't everything they expected, so it becomes a program that isn't "all its cracked up to be!"

Well, I reckon there are a few simple messages.  One,  is that if you want to increase your kilograms of beef producers and earn a greater return in your enterprise, you should be considering or implementing a crossbreeding strategy.  The only exception may be where you have a target market for straight bred animals that suits you and rewards you well enough already.  

The second message is you need to elect the best quality sires and dams from the breeds you want to use. Don't use second rate genetics!  Rubbish crossed with rubbish still results in rubbish!  

Thirdly follow the plan.  Most crossbreeding problems occur when people deviate from the plan, for example by keeping heifers that should have been sold or introducing a new breed without thinking about what will be done with the progeny.  

If you want to consider crossbreeding and if it will take your herd into a new direction of production, take the time to discuss options and ideas.  I've helped a few people in the last 12 months weigh up their options and we have come up with some very nice programs that will be exciting for their results and for the profits they will generate!

Feb 20

How much does it cost to buy cattle?

Posted on Friday, February 20, 2015

There's no doubt the prices for cattle have been a major talking point in the last two months.  The average sale yard price for cattle of all descriptions are significantly higher than the average over the past 36 months.  In some cases records are being broken and many people are struggling to remember if prices have ever been so high.  

With this strong market, I've received a lot of requests from people wanting to buy and sell cattle, as well as people looking to understand the industry a little better, to advise them on what an animal is worth.  

In the case of commercial animals, I rely on the NLRS market reports, that are available online every day.  These are the reports you hear on the ABC Country Hour or read in your weekly rural papers. I reckon these reports are the most useful guide on current market prices, and when we are looking at cattle in a paddock, its the best option to work out a value.

But how do you put a value, or budget on buying new breeding stock such as a new bull or some new cows?

There's lots of people who have an opinion on what a new bull should cost you.  As you can imagine the range in opinions is pretty broad!  I had some comments on the RaynerAg Facebook page on this topic, with suggestions about buying from smaller studs where the price will be lower, through to the importance of recognising the value of long term genetic improvement.

So how do you value the cost of a bull?  

Well there are a few things to consider.  The first thing is you are investing in an animal that will have an influence on three generations of your herd.  So you need to recognise that you are buying an animal that offers value over a long time.  

More importantly, the traits or genetics that bull has, may allow you to produce more kilograms of beef more quickly, or hit your market specifications more efficiently.  These improvements in your herd can earn you more, so spending on genetics might well be justified.

I reckon there are some things to think about when determining your spending limit.  Firstly how many cows will your bull be joined to in his working life?  Unfortunately the average working life of bulls is only around 3.5 years.  Many bulls seem to break down physically after this time.  This means if you want a bull to have a longer working life, you need to focus on structural soundness as much as on genetic potential.  

How many cows will your bull be joined to?  On average most producers join bulls at a rate of 3% to their cow groups.  Some bulls get slightly higher numbers, but this is pretty much a common joining rate in southern Australia (NSW, Vic, SA, Tas and southern WA).  From that we can work out that a bull will probably sire 30 calves a year for 3.5 years.  Which means an average bull may sire about 105 calves in his working life.

According to Beef Central, the average price for a bull across all breeds in 2014 was $4639.  on current market prices, the salvage value of a bull, that is what it is worth at the end of his working life is around $1500.  From this we can work out that the bull is actually worth about $3,139.  From this, you can work out the value of every each calf he sires.   In this example the cost per calf will be $29.89

If that is the cost of an average calf, then why would you spend more?  It now comes back to how much you want to improve your performance.  Not every bull is average!  Some bulls will grow faster, be leaner or fatter at the same stage of growth, some have better temperament and some have more muscle.

Genetic differences are the key to how productive your herd is.  Finding a bull with the genetic potential to move your herd can now be budgeted.  

It might be that if you can produce calves that will grow slightly faster than the average, you could turn your steer progeny off 3 weeks earlier.  This earlier turn off might allow you to capture a higher market return, and the extra value on those steers justifies spending more than the average on a new bull.

I reckon the challenge in determining how much it costs to buy cattle, isn't about the round figure sale price everyone likes to quote.  Instead I reckon its about working out: 

  • how much your calves cost you?

  • can better genetics help you achieve your target more efficiently?

  • is there a financial advantage to be had - either in the paddock or at sale time?

If you can answer those questions then I reckon you can work out the price you can afford to spend on bulls.  And if you don't really know how to start answering those questions, I reckon you should give me a call and I'll help you come up with some results to take you forward.

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