What’s the point of recording that?

This week I was tagged on Facebook under a comment regarding data collection.  The comment referred to a practice of recording the ratio of weaning weight against dam weight.  This is a comparison often used in the U.S. 

I have to be honest; my initial reaction was to be a bit surprised.  Not by being asked if it was a method I used or recommended.  Rather, my surprise stemmed from this data itself.

I’m not saying this data isn’t useful.  For some people I’m sure it could be a useful piece of data.  However, for me, and for most of my clients, its not the first thing I’d be looking at when I’m analyzing a business.

In previous blogs I’ve talked about focusing on the important traits within a herd, and on the importance of using data to drive innovation.  I’m still not sure that many producers are doing either of these as well as they could be.

I’m a very strong believer that making the most of your resources and investments to date is the first thing you should focus on.  Too often I see producers chasing fads, pursuing new options without ever realizing the potential of their current program. 

The only way you will ever realize your programs potential is to measure it and compare it over time.  The measurements have to be relevant!  There has to be a point in recording it. 

The point of recording is to establish where you are, and then to set some plans in place to maintain or improve your position.  So the whole point of recording is to focus on the resource you have! 

My second strong belief is you should always grab the big wins first!  To me, weaning ratio against mature cow weight isn’t a big win for most people.  Its something you may choose to focus on when you’ve ticked all the big-ticket items off.

So what are those big ticket items?  I know I’ve written about them before.  However for a breeding program they are:

• Conception rate (number of cows pregnant / number joined x 100)

• Weaning rate (number of calves weaned / number joined x 100)

There is an important point to this.  Weaning rate isn’t the number of calves weaned from the total number of pregnant cows.  It’s against your total breeders joined.

There is an additional big ticket item, which is calving percentage (number of calves / number joined X 100).  Again it has to be measured against total joinings.

The point of this?  Well it helps you identify fertility rate in your herd.  It assists you to clarify calving losses and weaning losses against your total numbers. 

I’ve come across many issues that happen post preg testing. These range from mid term abortion losses to dystocia and predation.  Having data helped focus problem solving onto those issues that were costing the program in a big way.

My additional big ticket items?  Well I like to know the numbers of cows calving at the start, middle and end of a set calving period.  If the numbers indicate a trend towards the middle and end, that highlights a real risk that cows are going into calf late.  If it isn’t addressed, those cows run a risk of falling out of a 12 month calving interval. 

In turn that lets me ask about weaning weights and perhaps then I may start looking at ratios.  But by then I reckon we have gotten the big ticket items sorted, and now we can start selecting on individual performance. 

So my question to you is what’s the point of the data you’re collecting?  Is it able to be used to fix the big-ticket items?  Can you use it to maximize the resources and investments you have?  If it can’t, then maybe you need to re-evaluate your collection.  And if you think you have the big tickets sorted, now you might be ready to fine-tune your program further with more targeted individual data.

And if you’re not really sure and you want to have a fresh set of eyes have a look, maybe its time to give me a call and get the independent assessment your business needs!

Profit - is it a numbers game?

“How many cows should I be running?”  “Is a higher stocking rate more profitable than a medium stocking rate?”  Over the last few years, these are questions I’ve been asked on occasion.  Following my recent post on the basics profit drivers, a few people have approached me with similar questions.

These are questions producers have grappled with for a long time.  Where is the benchmark for profitable beef production?  First of all, what does it cost to produce a kilogram of beef in Australia?  The latest figures I’ve seen from ABARES suggest that in Southern Australia, the cost is around $1.74 and in Northern Australia it is $1.75

Looking a little further into the data, it becomes clear that herds with small numbers are much more impacted on by costs associated with production.  In southern Australia, herds with less than 100 head don’t produce enough beef to cover the costs associated with the business.  Herds over 200 head are slightly more marginal.  Often they break even because the business model relies on unpaid family labor!

Moving over 400 head is where the operations seem to start to become less marginal and more profitable.  In northern Australia, the figures seem to be similar, with herds around the 400 – 1600 mark relying on the unpaid labor to get through and over that 1600 mark the systems become more profitable.

There is no doubt that higher numbers have a key influence on profit.  It’s very hard to capture economies of scale with a small operation.  However, its important to look beyond the simple argument that more cows means more profits.  Increasing numbers needs to be considered fairly carefully. 

I have been looking at some work on the relationship between stocking rate and profitability conducted in Queensland.  These have been very interesting to read.  The studies have looked at the relationship between stocking rate and gross margin for growing enterprises and for breeding programs. 

The key findings from the studies include:

• Increasing stocking rate does lead to an increase in production per hectare

• However this increase is offset by lower production per head

• There is a point where increased numbers will not increase production per hectare and may actually reduce production levels

• Lower production levels per animal will lead to price reductions for fat or MSA compliance. These often reduce any increase in gross margin achieved through the higher numbers.

• Increased stocking rates increase the demand for supplements and lengthen the time period of drought feeding

• Breeding herds tend to be less efficient with lower conception rates, lower weaning rates and lighter cull cow weights

From this work it appears that increasing stocking rates to high levels offers only short-term increases in profitability.  In my own experiences with producers who have pushed their stocking rates to high levels, it is a strategy that seems to increase risk to uncomfortable levels. 

By that I mean increasing the risk of seasonal conditions impacting more swiftly and to a greater degree.  Putting pastures under high stocking rates puts more pressure on plants and plant root systems.  Without a corresponding increase in fertilisers or plant nutrition, it doesn’t take long to see pastures become sparser, composition changes and animal performance decreases. 

The change in composition is a significant issue.  I have been working on the restoration of grazing properties in the south of NSW that have had a long history of high stocking rates and insufficient pasture nutrition.  Much of my work now is associated with programs to eliminate invasive weeds and replant desirable pasture species. 

Any increase in income from more animals has long been spent on worm control, supplementary feeds and now weed and pasture work. 

There is no doubt there are times when you need to manipulate stocking rates for specific outcomes.  I’ve recommended it with producers planning to renovate pastures, and we have used high levels to graze pastures right off in preparation for cultivation.  But that has been a short term management strategy.

I think the numbers discussion needs to be treated with some caution, and more importantly some realistic objectives.  I don’t think increasing numbers in the chase for more kilograms of beef per hectare is justified if it sees your animals struggle to meet production targets.

I can’t really justify the drop in conception rates for breeders or the drop in compliance rates for sale animals just to run a few more head.  So if you wanted to increase stocking rate and maintain high animal performance, you’ll most likely need to increase your fertilizer program, or your use of supplements or even both.  If it requires you to spend more to make that little bit more, is it really worth it?

When I am asked about the right number of animals, or what stocking rate to consider, I can’t give a definitive answer! What I can do is to work through the opportunities to use pastures efficiently and in a way that doesn’t compromise the long term viability of pastures, ensures high levels of animal production and doesn’t increase the ability to respond to changing seasonal conditions. 

So when you do look at stocking rate, take the time to look beyond the raw numbers.  If you are pushing stocking rate to the point where your animals are inefficient, or its costing you more in inputs than you are producing, you need to re-evaluate your program.  

Are you focused on the basics or the peripherals of profit?

In the last few weeks I’ve read several articles and discussions focused on beef production.  Specifically I’ve been looking for ideas or thoughts that I can bring into practice with my clients this year.  After all, my job is to work with producers to find better ways and more efficient ways to produce beef and make money.

One of the first articles I came across highlighted the huge difference between profitable beef producers and the majority of the industry.  This article from Beef Central, suggests that only 2 in 10 producers is actually making money.  Having read that, I was more struck by the fact this isn’t really news to me. 

For some years now it has been clear that the large majority of producers are not making nearly enough money to operate a profitable business.  It also seems that there really isn’t anything new in the way that the profitable operators are conducting their business.   In fact the profitable producers are focused on their practices on farm to producer kilograms of red beef efficiently and profitably.

So what is everyone else focusing on?  It seems the focus for the less profitable operators is on the peripheral things.  For some time I have been following an on line breed discussion.  The discussion is driven by participants desire to be more profitable.   However rather than sharing ideas to implement on farm or in the business, the discussion is now around issues that don’t really make money.

These issues include; why does “no one want to buy cattle from our breed?” “why do people overlook us in the sale yard” “we can’t advertise the same way the big breed societies do”. I actually find reading these points a little disheartening. 

It gets worse when the discussion moves towards more defensive positions.  These things include “well we had a good success in the show ring”, “our carcase competition results are always very good” “people say my cattle are great”. 

Its generally about then that I stop reading and go away a bit depressed.  In 24 years of judging carcase competitions, I’ve never actually met anyone who has been paid because of the results of a single animal in a carcase competition.  It seems a very weak argument to put forward when discussing ideas to change and be more profitable. 

Finally in one of the rural newspapers I read an article by an older cattleman who wrote about his work over many years, crossbreeding animals, and his focus on feed efficiency.  While these are both very important traits, I was a bit skeptical when it also suggested processors need to change their specifications to suit cattle producers.  I’m not really sure that any other business would think it’s a valid point to tell the customer to change what they want to suit the producer!

So what does this really mean?  I think it means many people are focusing on peripheral issues that are not the primary driver for business profitability. 

In my books a profitable beef herd is a highly fertile herd.  It must have not only high conception rates, it also needs to achieve those conception rates within a defined joining period.  For many herds this really should be within 6 to 9 weeks. 

Those cows should then be able to actually calve and rear that calve through to weaning.  And then be rejoined in order to produce another calf in a 12 month period. 

Having worked with many producers, across regions this is the crunch point for me.  The producers who achieve these things with their cows are already achieving higher levels of productivity and profitability for their businesses. 

The next key point is animal growth.  Growth isn’t just genetics.  It isn’t just nutrition.  It is the combination of genetic selection.  I think t be more specific, choosing cattle for your country!  Choosing the genetics, the breed type and the animal type that suit the environment you live. 

If you get that bit right you are already on the way to making nutritional management that much easier.   After all if the cattle suit the country, your management should complement the animals ability to use your pastures efficiently.  But if your cattle don’t suit the country because their maturity pattern isn’t quite correct, or for some other reason, you will have to spend more time juggling feed and cow condition to ensure they get into calf, rear that calf and that any progeny meet market specifications.

I know fertility and growth (from both genetics and nutrition) has a direct link to business profitability.  Its pretty clear from lots of industry studies, the herds that produce more kilograms of beef per hectare are the more profitable herds. 

What I don’t really get is if it is so clear, why do we ignore these areas to focus on the peripherals?  I’d get it if a producer was ticking all the boxes in fertility, in growth, in nutritional management.  If the were I would see that they were selecting animals for market specifications and selling tem to capture the value those animals are worth.  In effect, if you tick all the boxes it opens up the peripherals to explore and extract a little more value.

I know some producers will be defensive when they read this.  I’ve heard it in comments such as “my cattle are fertile”  “Its a very fertile breed”.  My response is how do you know?  I know not everyone pregnancy tests.  I know that not everyone selects for females that go into calf early in the joining period.  I know that many cows are joined for longer than 3.5 months. 

So what does it really mean?  This year I’m challenging all of my clients, old and new to look at the basics objectively and honestly.  To make sure we are ticking the boxes.  The peripherals that distract many in the industry won’t play a part in our decisions until we get the boxes ticked.  I’m actually excited by this! I’m confident it will set my clients up to either become part of, or remain well within the profitable sector of the industry. 

Don’t forget if you’d like to step up and take the challenge, I’d love to hear from you! 

Using benchmarks in your business

Over the last few months I’ve been considering the role of benchmarks in business. I’ve always thought that benchmarks are important.  However the question really is, why are benchmarks important?

The original use of the term benchmark related to marks stone masons would chisel into stone so that leveling rods could be placed onto the stone bench.  The mark allowed the masons to return accurately each time the rod needed to be reused.

In business I think we use the term in slightly different ways.  Ideally a benchmark is about setting a mark, or a measure on the factors that determine your production and profitability.  They should be measures that can be repeated each year so that you can determine if your business is meeting your own goals.

Unfortunately I reckon too many people see benchmarking as a form of competition!   I not sure where that impression came from.  I guess some people are naturally competitive and try to be the best at everything.  

Many producers work in groups to share their benchmarks and to learn from each other, so perhaps there are some people who just like to compete on everything!

So when I am asked about benchmarks, my first point is that it isn’t a competition with anyone! 

My second point is that benchmarks should be yours. By that I mean, you need to set the marks in place that let you come back and assess your progress each year.  They have to be realistic and reflect your business model.  There’s no point trying to compare what you are doing to anyone else in the first instance.  So if you are operating a breeding business, your benchmarks should focus on those areas around fertility.  You should know:

• Your pregnancy rate for heifers, first calf heifers and cows.

• Calving spread over your calving period

• Weaning weights and numbers

There are more measures that you could record.  However these will at the very least let you determine if your herd is operating efficiently. 

If you are operating a finishing program can you record growth rates; compliance with specifications; age or weight at turn off? 

There are quite simply plenty of measures that your business should have.  I talk about this data as being useful to drive innovation.  Quite simply it is using these results to fine-tune your management to improve and achieve better results you’re your business.

Setting some on farm benchmarks gives you a chance to take a critical look at your program.  I know in my own business it’s very easy to get caught up in the cycle that is best described as “busy being busy!”  

Having some set measures in place makes you stop and look at what you are doing.  The chance to stop and look is critical.  You really need to look at how you are spending your time, effort and money?  If its not working as well as it should – i.e you are not hitting your benchmarks, then you can take control to correct the issues. 

I reckon the third and most significant reason for using benchmarks is to give you a focal point to stop and take a critical look at the business.  It’s difficult to argue with hard data.  The data you collect gives you the information to reflect and ask critical questions. 

This brings me back to my earlier points.  In my mind, asking critical questions and looking at your progress each year, is fundamental to operating a successful beef business.  Should you try and compare against other people?  Well comparisons can be useful.  They can help you see the potential for improvement or highlight areas of opportunity.  But just making comparisons wont change anything!  It’s nice to know what the national Cost of Production is and where yours relates to that.  But if you don’t use that information to change your own practices, well I reckon you aren’t achieving anything for your business.

Data to Drive Innovation

Do you collect data on your farm?  What are you doing with it?  Have you ever stopped to think about what you are recording and why you’re actually doing it?

I’ve been thinking about farm data for a few days now.  I recently listened to a podcast featuring Alastair Campbell. If you don’t know that name, he was the former Director of Communications and Strategy for British Prime Minister Tony Blair.  I’m happy to say the podcast was from the US University of Chicago called the Axe Files and I was listening to different approaches to leadership and communication. 

There was some really interesting ideas in these podcasts.  However the one that sticks in my mind was the conversation with Alastair Campbell.  He made a comment about collecting data. And why do it. 

His point was that in sports, data collection is essential and is used to drive innovation.  To make the athletes, the players or the team that much better and more successful in their pursuit of better performance.  Conversely his comment was that in his experience with politics, data isn’t used that way at all.  Instead of driving innovation, data was used to confirm a bias, and to preserve the status quo. 

I’ve found it really hard to stop thinking about this comment!  In some ways it makes so much sense.  Sport and any level is about getting better.  No matter if its just social cricket or professional soccer, sport is about improvement.  Think about it!  We practice, we train, we look for coaching. 

At the elite levels there are coaches of specialist skills.  I know my team, the Sydney Swans has kicking coaches as well as trainers and nutritionists and other specialists to monitor every part of the team with the goal of winning a premiership!

At the social level there is often someone coaching training, offering advice, recording the scores and monitoring the performances of the team.  All of that data collected in the search for continual improvement.  And often that search results in something innovative coming along that makes a difference.

So what’s happening in the farm business?  Are we doing the same thing? Is the data we collect being used to drive innovation and achieve improvement?  Or are we using it to conform our bias.

Think about you farming business as if it was your favorite sporting team.  I did this thinking about my firefighting championship team.  We have a team of 6 people.  I know them all very well.  I know who is fast, who is strong.  There is one member who can be relied on to do one job perfectly without fumbling!  I know where we prefer to compete and who does what.  In short we know the team well.  Secondly, we practice and we try to keep ourselves at the level where we are doing the right thing every time, until we don’t need to think about it too much, it just happens. 

I reckon your team might be the same.  You would know the strengths of all your team players.  You would know what they were good at, what they can do well.  If there was something that needed improving you would all talk about it and practice it until it improved.  You probably all have a chance to share advice.  And I guess you might have a coach who is watching everything.  The person who looks at the data and the things you are doing and gives you the guidance to improve after seeing all this objectively.

So now, I want you to think about your farm business.  Firstly if it was a team, can you confidently say you know all the strengths and weakness of your business?  Do you know how you stock, your pastures, your environment responds to different challenges.  If you had to be objective could you point to a specific area that needed improvement?

Next, how do you know this?  Are you observing the performance of your business objectively?  Remember its pretty hard to be objective about your performance while you are in the middle of the game!  If we quickly look at sport again, when you are playing you don’t always get the luxuary of stopping to see if you are doing the right thing to help your team win.  You tend to be focused on the game and need the input of the coach to help you get it right.

So in your business, if youre so focused on day to day operation, are you really as objective as you should be? Can you think of a coach or even some specialist coaches who can monitor you and your performance and work with you to refine your approach and decisions?

The other key part of this is what data are you collecting.  Now most farmers tell me they keep good records. I know some farmers keep amazing records.  I also know plenty who don’t keep anything!  Its true!  I’ve been to places to preg test, and the owners has had no idea about how many cows we will be testing let alone think about fertility rates!  Seriously!

So records or farm data. Some of it is comprehensive.  Some of it is lacking.   But what do we do with it after its collected?

Are you using it to measure your performance?  What are the trends?  What does the data show you, and are you looking at ways to tweak your business. Tweaking is about finding ways to be innovative and do better. 

The best example I can think of is a client I’ve worked with on the New England tablelands.  We identified an issue where the MSA scores of cattle sent off tended to fall during several winter months.  Now that was a costly issue we wanted t solve.  Now strangely enough the fall wasn’t so much as a direct result of the cold weather. 

When we looked at the MSA data, and compared it to the farm weather records, we couldn’t blame the snow and sleet.  In fact the MSA scores were a little better on average when the weather had been a bit bleak.  What we found was when the bleak weather came, my client offered some supplementary feeds and this resulted in less stress on the cattle and so the pH and the MSA scores were a bit better.

The more we looked across several records the more we could see that whe it was a dry winter, MSA scores were a bit lower, because the client wasn’t adding any extra feed to the paddock feed.  So energy was a bit lower at slaughter and MSA scores were lower as a result.

We ended up developing a late autumn – winter feeding program for this enterprise.  Yes it cost a little to feed the stock, but the increased MSA scores and payment on quality offset it.

That to me is tweaking and using data to be a bit more innovative!  We found a way to increase performance. 

I reckon that’s the difference.  When I think of so many places I go to that collect data.  When I preg test, they keep percentages.  But I don’t know many people who are showing me trends, or comparing preg testing results against seasonal conditions or heifer joining weights or any other comparisons that could be made. 

In some ways that data is just used to prove bias.  That might be to prove that joining time is ok.  Or that the heifers were heavy enough.  If results are bad well someone might change a few things, but often it’s just a result that on its own doesn’t mean much.

So can you use the data and not maintain your status quo.  What can you look for that will make your business perform better?

Second who is helping you be objective about what your recording and what you are doing?  If your social cricket, football, netball or hockey teams have a coach, then surely it makes sense that your business needs one as well.  Getting someone in to help you use your data t drive innovation might be the thing that really lifts your business and helps you achieve some of the goals you are aiming for.

Ultimately innovation doesn’t have to be some sparkly new piece of equipment or technology.  It might be a simple change in approach or attitude that is the innovation. If you don’t think about using your data to seek that innovation, well I reckon your wasting your opportunities.

Setting a few benchmarks

Do you have a benchmark for production?  How do your management practices sit with best practice or against similar operations?  These are the types of questions I'm often asked by producers.  And these are questions not just being asked by my clients, I often get them in general discussions at field days, the saleyards, pretty much anywhere where a few producers might be chatting.

So how do you compare against others?  Does it even matter?  Well I guess what matters is if you are operating a financial and environmentally sustainable enterprise.  If you are doing that I reckon it doesn't really matter what everyone else is doing!  

Having said that, for most producers I know, there is always scope to improve their management or their production systems in some way.  Benchmarks can be a really useful tool to make those improvements.  

When I mentioned this to someone this week, their response was how are benchmarks useful? I reckon one of the best responses is that to create a benchmark, you have to make the time to consider what is being measured and actually respond with some real data.  

The very fact that real data is required actually causes producers to start considering what is actually happening in their programs.  It is very easy to overlook parts of the enterprise - the little things if you like, that on their own don't seem that important.  But when you accumulate a few of those things, they can have a massive effect on the overall business.

I reckon comparing your performance against a benchmark gives you a chance to objectively measure where your program is heading.  The way this needs to be done however is not to think that a once only assessment will mean very much.  

The first time you compare yourself to a benchmark you are really only comparing yourself to a single point in time.  You might be on par with that point, you could be above it or below it.  Whichever way you compare, the first time is really just the starting point.

To get some value, and make useful decisions, you need to do some comparisons over a couple of years.  This will show if there is a trend up or down.  

Having said that, if there are some things that you identify as being well below the benchmark, its a chance to get in and try address those issues as quickly as you can!

The other question many producers ask sits around what do you benchmark yourself against?  There are plenty of people throwing around benchmarks and production levels.  How current are those levels, how realistic are they?  These are all things to consider.

Personally I am a little unsure of what the realistic measures are for the producers I work with.  And there seems to be a fair bit of variation in what people are doing.  So this July I decided to conduct a benchmarking survey of RaynerAg clients and producers who use RaynerAg for advice.  I have to say, its not a short survey!  But if I'm going to collect data that I can use to help producers and have some meaningful benchmarks, well it has to cover a few things.

So far I have had some useful responses.  I am getting much better picture of some general practices that we can all improve and a few useful trends on fertility that might provide some easy but effective strategies for breeders.  Keep watching this space over the next few months and I'll share some of the findings as I complete the analysis.  

If you haven't completed the survey and you'd like to be part of developing these benchmarks, please feel free to click on the link and complete the survey.  I reckon we are all going to get a few useful results from the exercise!