Despite record beef prices, lessons from the Australian lamb industry suggest that increasing beef cost of production will soon erode profits if producers don’t stay focussed on their key profit driver – low cost beef production.
Calculating beef business cost of production and building a strategy to maintain the long awaited beef profit margins will be the focus of a beef producer workshop to be held in Armidale on September 21.
The workshop, partially funded by the successful MLA ‘More Beef from Pasture’ program and the NSW Government ‘Business Skills Development Program’, will take 15 beef business owners through an intensive six hour learning program structured to generate strategies for low cost beef production for participating businesses.
The workshop coach, Dr David Brown, is a sheep and cattle production expert from livestock benchmarking specialists Holmes Sackett, a farm business advisory servicing south east Australia and Tasmania.
“When lamb prices kicked a few years ago, producers did poor job at containing lamb cost of production” David said. “The Holmes Sackett benchmarking data showed that year-on-year growth in lamb cost of production outstripped price received”.
“Producers became distracted by the ‘easy money’ and profit margins were again eroded by poor productivity and rising cost of production. In a region where there is fierce competition for land use we need to make sure our livestock producers are very profitable so they can compete”.
This course demonstrates how important low cost of production is to maintaining beef businesses profitability over the long term and presents the concept in a logical and easy to understand manner.
The program will uses a mix of theory, practical case studies of highly profitable beef businesses and applied learning to ensure even the most discerning producers are kept engaged with clear, relevant information.
“A key strength of this workshop”, David says, “is that participating business will calculate their own beef ‘cost of production’ and be able to compare it to other businesses and the Holmes Sackett Average and Top 20% producers to identify opportunities for improvement – real take home actions.”
Kim Barnet is a sheep and beef producer from the New England, north east New South Wales, who has attended a past Holmes Sackett ‘cost of production’ workshop.
“That was the first cost of production workshop I’ve attended for a long while and I found it very useful” Mr Barnet said, “Opportunities to attend these types of workshops don’t come around often, so it was good chance to participate”.
“David Brown delivered clear, concise and relevant information. The workshop really opens your eyes to what it’s costing to produce our product. Also, being able to understand what’s driving the variation in cost of production among the participating businesses on the day provides an indication of what low cost production looks like, and how it may be achieved”.
Mr Barnet was impressed with the cost of production tool and support provided during the day to participants. “To be able to sit down with someone familiar with this area of business and calculate your cost of production in an afternoon is definitely a drawcard of this workshop”.
The workshop will be held at the Armidale Bowling Club on September 21, from 9 am to 3 pm. Participation is limited to 15 businesses and registration in advance is essential.
To register visit https://lowcostbeefdrivesprofits.eventbrite.com.au
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