I often get asked about the relative profitability of animals from different studs, different breeds and even different species. The most accurate answer I can offer is - it depends!
Clearly, there are limits to where you can run certain livestock. Tropically-adapted cattle are the kings of Australia’s north but aren’t competitive in the south. Running ultrafine or superfine sheep in country that is prone to dust and high vegetable matter is also unlikely to have a happy ending. These are stark examples of where the match between the production environment and the animal chosen to run there is important. However, for large tracts of grazing land around the world, producers have the choice of running cattle, sheep or goats, with a myriad of breeds or composites within these species to select from.
At neXtgen Agri, we remain agnostic to species or breed. Unless asked for our direct advice, we largely don’t take a stance on which species or breed to farm, but rather focus on how to best breed and farm the ones our clients choose. It probably has some people confused to see us in the race selecting Merinos one day and working with UltraWhites, Angus cattle or Angora goats the next day. For lots of people, these are vastly different beasts. For us, the fundamentals remain the same.
The principles of defining a breeding objective, measuring every aspect of that breeding objective that you can, ensuring that data is corrected for fixed effects and incorporating pedigree wherever possible are the same regardless of which animal we are working with. Things like structure and freedom from fault are also universal, although fibre animals have additional traits to consider.
Benchmarking shows that the relative profitability of different livestock enterprises is never chalk and cheese. Australian Wool Innovation released a report this week, written by John Francis of Agrista, which demonstrated that even with depressed wool markets there is still money in Merinos for those that do it well. You could release the same report for a beef enterprise, a specialist lamb enterprise, a goat fibre enterprise and anything in between. The money in livestock businesses is in how you do it, not which one you choose.
Here are the 10 As of operating a good livestock business (and choosing the right one for you):
- Alignment - owners and managers need to believe in what they are doing and be passionate about the end products. It is hard to do something consistently well if you don’t have a common passion across the business. Some people love wool. Some people hate shearing. Choose the enterprise or enterprise mix that you are most aligned with.
- Aware - when considering options “the grass is always greener” theory is strongly at play. Everything looks better than the current enterprise. You know the current enterprise intimately and know all of the good, as well as the bad. You know less about what you are moving to. Talk to lots of people before making big changes. I am not saying procrastinate; talk to lots of people, but do it quickly and deliberately, and then make your call. Apparently, it was Wayne Gretzky who first said, “You miss 100% of the shots you don’t take”.
- Achievable - you can probably run anything anywhere if you put your mind (and resources) to it. It is important to run a livestock business that plays to the strengths of a property. This doesn’t necessarily mean doing what the neighbours are doing, but an analysis of the pasture growth curve and variability in that curve should clarify the livestock options that are on the table. Importantly, you need to select a livestock system that can be run sustainably without consistent and excessive costs.
- Adherence - success is about doing the common things uncommonly well. Everyone knows the annual calendar of a livestock business in a particular region. Being really deliberate and consistent with your decision-making will bring success.
- Astute - thinking like a business manager is different to thinking like a stock manager. To have a successful livestock business, you need to have both sets of skills within the business. You need to lead in a way that encourages the mindset of an unstoppable entrepreneur. The power of a mindset should not be underestimated in building a winning livestock business.
- Analytical - knowing your numbers is the single most important factor in running a successful business. Ensure you keep a close eye on the cost of production and continue to make business adjustments toward a lower cost of production. Remember: reducing costs and driving up production both reduce the cost of production.
- Advancement - staying still is going backwards. Livestock businesses that stand the test of time will be those that innovate and invest in the future. You cannot save your way to prosperity. Continuing to invest in the future is important, even when it hurts. Across the business, you need a mindset of innovation and continuous improvement.
- Assistance - it is not possible to know everything about everything and to remain completely objective. The saying goes that you are a product of the people that you surround yourself with. Make sure that you are deliberate about this and have the right people around you to help you make decisions based on facts and not emotions.
- Appreciation - celebrating the successes and acknowledging the failures that occur along the journey are both critically important. It is too easy to let milestones come and go without stopping and celebrating these achievements. It is equally easy to end up with a business culture where mistakes are dealt with harshly, resulting in the blame game. Increasing your success rate will be a direct result of increasing your failure rate, the more you embrace this, the better you will go. Above all else, make sure there is plenty of room for fun in the business.
- Attuned - at the end of the day, someone needs to eat or wear the products that you produce. The better you understand what drives your consumers’ choices, the better you can tailor your production system and genetics.
This list is far from exhaustive - and I’m partially regretting the decision of making all of the words start with A - but hopefully it has made you stop and think for a minute or two.
I think it is often easier to change what we do rather than how we do it. Being wrong about what we do is for some reason less personal than being wrong about how we do it. Whereas, in reality, changing how we do it is much more likely to result in a better outcome than changing what we do.
There are also lots of examples where the two things go together and this can be a great outcome. People shift from one enterprise to a different one and because they know less about the new enterprise, they adopt a naive mindset, they ask lots of questions, they are willing to be wrong and they don’t have the baggage of ‘this is how things are done around here’. Changing enterprise might take them from being a below-average farmer of one product to a top 30% farmer of a new product, just because of the approach they are taking to the new enterprise.
Are you considering a change in what you do or how you do it? If so, let me know the decision-making process you are going through.
