Production

Strategies to increase the profitability of extensive beef businesses

Beef Central, 29/06/2015

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THE findings from the Northern Beef Report show that there are some beef businesses that are currently highly profitable. These businesses are able to provide for the needs and aspirations of their owners now and into the future.

While these are, however, in the minority, there are significant opportunities to improve the performance of all beef businesses across the northern industry.

So what can northern producers do to improve the performance of their business so it can better provide for the needs of the family?

Ian McLean from Bush AgriBusiness addressed this topic in a Beef Connect* webinar held last week, titled, ‘Strategies to Increase the Profitability of Extensive Beef Businesses’.

The webinar identified the following seven key strategies in improving performance in northern beef businesses:

 

Run as many Adult Equivalents as you can, but no more than you should

Determine your long Term Carrying Capacity (LTCC) and Land Condition. Then:

  • Base long term planning around LTCC,
  • Match stocking rate to available feed in the short term,
  • Maintain land in good condition and improve land not in good condition

Focus on maximising the kilograms of beef you produce in the long term (Kg Beef/AE)

This is the most effective way to increase the income of a beef business

Ruthlessly scrutinise and optimise herd expenditure.

Every dollar spent must return much more than one dollar.

Achieve labour efficiency of 1500 or more Adult Equivalents for every full-time equivalent of labour

Labour has tentacles which go throughout the cost structure of a beef business. At any given scale, reducing labour is the most effective way to lower the overhead costs of a beef business.

Honestly assess your situation with regard to scale

Determine if you have a part-time job or a standalone business that either has sufficient scale, or has the capacity to profitably grow.

Don’t pay too much for land

Do sums very carefully when buying land, or considering any major capital investment.

What you can afford to pay for it will be a function of what it will make you and what return your require on your investment.

Become a professional business manager

Acquire the knowledge and skills required to successfully run a multi-million dollar business in the 21st century.

These are not the same as the knowledge and skills required to successfully run a cattle station in the 20th century.

 

These strategies, and why they are important, are detailed in the recent Beef Connect* webinar, a recording of which is accessible here, to view at your leisure. Just scroll down if you don’t see it immediately.

 

* Beef Connect is a joint webinar extension program conducted by FutureBeef and Beef Central website, with funding from the Queensland Government and Meat & Livestock Australia.

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