Top traits of top performing beef and sheep farms

We studied outstanding beef and sheep farming businesses and what sets them apart from the rest. While ranking common themes is difficult as their impacts vary from farm to farm, for a general perspective of importance overall, the following order is identified with some related real-life examples of actions farmers are taking. 

• Size matters in beef and sheep farming
• Cost control
• Tenure
• Unpaid labour
• Stocking rate
• Concentrate on what you are good at
• Technical excellence is critical

It does appear from this analysis, and also the case studies, that there are benefits to be achieved from being above a certain size. This should generally be measured in total farming activity, rather than simply hectares or head of cattle because lots of cattle might mean they are finished very slowly. An analysis of beef farms once undertaken for an entire country, showed the largest loss makers were very large farms doing a very poor job. The conclusion of this is that growing is not sufficient, you have to be technically good (and profitable already) to start with.

“Suckler cow numbers had been around 30 cows but in the last 2 years numbers have declined substantially following a run of empty cows. The new bull has had some trouble with lameness and Mark admits he’s been slow at getting his feet looked at which is likely to have led to the bull being infertile for large parts of the year.”

Flood Farm, Bottom Performer

Agriculture is a commodity industry with tight, variable and unpredictable margins. The only way to win whilst remaining in this system is to keep costs to an absolute minimum (without jeopardising profitable output). On almost all beef and sheep farms, there are more opportunities to reduce overheads than variable costs. Variable costs will improve the grassland, and the stock that grazes it, and these are easy to vary from year to year. Overheads, once they are in the business are very hard to remove.

“The system [bucket rearing dairy-bull calves] ran well for the first year but with the significant rise in costs of milk powder and feed in the last year, Mark suspects he has not made a profit on these for the past two crops. Not that Mark is sure about that.”

Flood Farm, Bottom Performer

Renting land is clearly not an insurmountable business cost. It offers the opportunity to reach the critical farm business size in hectares. It might also help sharpen the mind with some additional costs to pay. It is not clear if tenant beef and sheep farmers are simply better or whether renting land simply allows them the opportunity to grow. Whichever, it appears to have helped many farmers.

The resources on farm either come at a cost or come at an opportunity cost. In other words, you either pay for them in cash or something similar, or you pay for them by not doing something else that could be generating an income for you. Whatever the value of what it is you are not doing is referred to as the opportunity cost. When a farm grows, you need people to operate it and paid staff, it appears generates opportunities for you.

More farming allows greater output. Getting the optimum stocking rate to maximise the output from forage forces better use of land, a key resource on any grazing livestock farm. It also diverts from simply pumping more expensive bought in feed into livestock which is an expensive way to raise output and not always successful, especially at the marginal level. The statistical research is clear here, work on improving the productivity of land and the quality of the grass and forage produced. This is the cheapest way to produce livestock.

“Good grassland management is critical with this group. Sam has a rotational grazing system with larger fields split by electric fences. Using electric fencing is a cheaper method of splitting the fields than permanent fencing and also allows these to be removed should the paddock sizes need to be altered or if the field is closed for silage. Sam has measured a significant improvement in grass growth since starting rotational grazing. Giving each paddock a 28 day recovery before cattle are put back in the field allows plenty of regrowth opportunity”

Top-End Farm, Top Performer

The statistical research tells clear stories of how taking on a secondary enterprise can distract the management, steal resources from the farm and be fundamentally less profitable than the main farming system.

“Mark works part time on a local farm to bring in some additional income as he doesn’t make enough profit from the farm system. This leaves him slightly short of time as farming is a busy job to do. He finds he works long hours and late in the day so is bitter about the other farm job. When he is tired, he becomes impatient with his farm jobs.”

Flood Farm, Bottom Performer

Livestock farms are busy businesses with plenty going on. Keep the system simple and understand what you are doing exceptionally well. Identify where excessive time can be saved by making the system efficient. And make sure it works for you without feeling like you have to spend more and more time on something. That will allow you to make time for family and friends.

“The sheep enterprise run on the farm is a low input system. He buys 300 ewe-lambs every year and these are run empty through the winter and are sold as yearling ewes for breeding. The farm used to run a flock of early lambing ewes but found the system too labour intensive for the output produced. The current system offers a good return on investment with very little labour.”

Top-End Farm, Top Performer