After studying the northern Australian cattle industry for more than 40 years, Dr Geoffry Fordyce is a leading expert in grazing management and fertility. In May, Gulf Savannah NRM held a herd profitability workshop with Dr Fordyce, and we caught up with him for his top tips.
Are producers missing out on easy wins to improve profitability?
Practical change equals behaviour change and that’s a challenge. So, the changes won’t be easy, even if they’re technically simple in principle. A beef business is a feed production system where you transform available feed into live weight. Your earnings are the kilos you produce by the market value of those kilos — so the focus needs to be on how many kilos you are producing and how much it costs to produce those kilos.
What are the first steps to refreshing your business strategy?
Like every business in the world, cattle business operators wanting to analyse what they are doing, need to do an accurate annual pasture budget and stock take plus describe transactions using the same simple categories. Tax figures are not enough to make decisions with. From there you can calculate kilos of pasture you have for cattle, kilos of cattle you should have, kilos of live weight you can produce, dollars of income, and dollars it will cost per kilo of live weight produced.
In your experience, should producers spend more time on their business strategy?
Cattlemen first and business owners second tends to be the default in beef production systems, but we need to flip that script and be business owners first. You can distil the system’s key elements into: Kilos of grass, used to produce Kilos of cattle, to derive Dollars of income, at Dollars of cost Every decision you make should be through evaluation of those four elements, seeking best business impacts. If you’re using percentages to evaluate a strategy, you’ll know there’s something wrong; the percentages are used to fix something when you find something wrong or an opportunity to shift the four key elements.
Read the full interview with Dr. Fordyce in the latest Gulf Croaker:
This project is funded by TNQ Drought Hub, through the Australian Government’s Future Drought Fund.