The farm is only the venue

Posted by Brendon Walsh on 2 December 2014

The way we usually view our sheep and beef farms in New Zealand has unfortunately moved many farmers perspectives down a track so unhelpful that they are in danger of a life of hard labour and a challenging succession situation. This has become so dire that without knowing it many farmers are working hard for the interests of other organisations and are using their own energy, sweat and resources to do it. What really worries me is that to most it doesn't seem that bad and that reflects how insidious the problem really is.

What do I mean? Sheep and beef farmers in general have lost sight of creating their own successes and futures because they have accepted a way of thinking and operating that ultimately takes them away from generating spare cash, and away from helping them achieve what is most important to them. There is a real focus on generating more income (through practices that they are sold and told bring in more income - a very convincing argument too!) instead of banking great profits every year. Does this sound confusing to you? I hope it doesn't. Income and profit are 2 different things - read my other blogs on this.

You see farm performance is usually linked to how well the land produces the physical products or sometimes what the annual farm profit is for every unit of land. However, the farm is only the venue - the venue for the business to do it's thing and create results for the business owners. The business is really in the decision making and in how well those decisions bring the available resources together to deliver the results the business was created to achieve.

I was recently talking with a GrowFARM client who had just had a discussion with a friend of his who owns a pharmacy. They were discussing how sunscreen is not put out on the shelves in the winter because it is not profitable to do so. The sunscreen takes up space and brings in minuscule income that adds up to way less than the business operating expenses of holding it there (a non profit period). There are other products that can bring in income that far exceeds the operating expenses that need to be allocated against the income. Sunscreen can then be re-introduced during the months when they generate a good profit for the Pharmacy (a profit period). This sounds simple I know but why do many of our sheep and beef farmers persist in ignoring profit periods of their animals? Often they end up with a whole lot happening all through the year in the belief that running more animals all the time means more profit (perhaps this is why). They just end up draining the main resource they have available that could actually allow profit to flow for them. Granted, many do not know about or understand the 6 Profit Principles so that will be part of the reason - lack of accurate knowledge. But accurate knowledge is something that can be gained by anyone who chooses to gain it. The real knowledge is there if you think about it and go looking for it.

By the way, what is that main resource? Its pasture cover or Dry Matter (DM) available, to be turned into profit (yes this carries with it the inherent assumption that the appropriate pasture quality accompanies the appropriate cover).

In a sheep and beef farm business, pasture DM is the main resource a farmer has to turn into profit, not hectares of land.1000 ha of 1200 kg DM/ha pasture cover is virtually useless against 200 ha of 2000 kg DM/ha pasture cover. I know which one I would have any day! It's about how that pasture is converted into profit AS IT IS EATEN through the full feeding of profitable animals during profit periods (Profit Principle #5) and full feeding requires good pasture covers. This is totally under the control of farmers via their decision making, regardless of the area of land you have as the venue for carrying out the decision making. Once sheep and beef farmers begin to understand this way of thinking and operating, it changes the whole deal! You have the land you have - make it profitable and get on with it! Then, you can create options for scale if you still want to, without the false belief that you must have scale to be profitable, and the pressure of feeling like you have to get bigger. 

It is far more fruitful to create a highly profitable sheep and beef farm business so you can scale up a high profit system, rather then trying to scale up a low profit system (you still get low profit but just on a bigger scale). If you are serious about wanting to know how to do this, download our ebook:

7 Reasons Why Sheep and Beef Farmers Don't Make Profit

- And a Step By Step Process For Turning Your Farm Into A Profit Generator.

Click here to download your complimentary copy: Download the 7 reasons ebook

It is our gift to you and it is your introduction to getting started on the profit track. Make sure you turn your decision making into spare cash, through whatever land (venue) that you have. You too can be profitable and it starts here!