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How much profit do your animals really make?

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Posted by Brendon Walsh on 2 August 2018

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As a sheep and beef farmer, do you really know how much profit you are making from an animal?

Many farmers tell me they do. For example, they might buy a lamb for $100 and sell it come time later for $130. Or, it might be animals already existing on the farm where they are worth $100 at point A and then at point B later, they are worth $130. Both of those people might say “Hey, there’s a profit of $30.”

But no! That’s the margin or income if you like. Some people will look at it using gross margin, but neither of those are actually profit. You can’t just allocate three or four expenses against that income and call it a profit.

All income must cover all farm working expenses and have a lot left over. Every animal or group animals must do that so that the overall farm business does that. So, if you are using margin or gross margin only, stop kidding yourself - they are not reliable for profit decisions. That’s why many sheep and beef farmers are working hard and still delivering a reasonably low profit.

You need to know the true profitability for any animal at any time of year, after all farm working expenses have been allocated, not just three or four expenses. For example, you need to include a share of your accountancy fees, your R & M, your electricity, your fertiliser - all farm working expenses! If you know that ahead of time, you can make some great strategic decisions to set up to make great profits, regardless of the conditions you may be facing in your business.

Now, Growfarm® clients know the true profit of their animals ahead of time because they are calculated automatically for all stock classes in every week of the year. They get that through the use of ProfitLIVE® - the Growfarm® cloud-based system. You won’t get that from any other system available in the market.

For many clients, this has changed the deal for them. It’s changed their lives! When you see people on average sized farms paying off an extra $50 000 to $100 000 of principal per year over and above what the bank requires, that’s just ahead of the game.

So, if you’re keen to know more, download our free ebook from our website at http://www.growfarm.co.nz/download-free-ebook-7-reasons/  or get in touch for a chat.

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