The e-profit monitor is a Teagasc-developed benchmarking tool that measures the performance and production efficiency of a farming enterprise. The 2015 analysis includes figures from 553 beef farms and 137 sheep farms, compared with 924 and 191 beef and sheep farms in 2014 respectively. Here, the top third of e-profit monitor drystock farms, based on bottom line, are examined.
Taking into account average farm and flock sizes, the top 1/3 of suckler beef, suckler to weanling and beef trading farms achieved net profits of €33,822, €7,119 and €26,851, respectively. The top lowland sheep flocks produced a net profit of €8,487. These figures do not include premia (BPS, GLAS, BDGP, AEOS, etc.), though these are presented below.
Comment
The Teagasc National Farm Survey, a separate entity to the e-profit monitor, tells us that the average beef farm system is losing money. Yet those in the upper echelons of the e-profit monitor analysis have established sustainable, profitable farm systems. What is the difference?
Two things: output and efficiency. Take the example of suckling to beef: stocking rate on the top farms is at 2.4 LU/ha – the national average is 1.29 LU/ha. Beef output per hectare on these top farms is up at 882kg/ha – the average farm produces 400kg/ha. Even on an individual animal basis, the top farms according to this data are producing 368kg/LU every year. The national average suckler cow is producing just 304kg annually.
What this proves is that output generation is not all about heads on the ground – big output gains are possible at individual level too.
2014 versus 2015
Relative to 2014, net profits on the top one-third of suckler beef and store-to-beef farms increased by 101% and 43% in 2015. A strong beef price for most of 2015 and weak live prices in 2014 were the principal drivers for these increases in profit. In contrast, net profit on the top third of weanling/store-producing decreased by 6% in the same period. However, gross margin actually increased by 17% on these farms during the same period – the dip was driven by growing fixed costs on the farms recorded. On the country’s top lowland sheep farms, net profit in 2015 was up by 12% on the previous year. Higher slaughter weights and a reduction in the amount of replacements retained contributed to the increase, as well as a slight reduction in variable costs.
Reality check
We cannot deny the facts: 2016’s beef price has been lower than 2015 at all points since January. This will undoubtedly hit this year’s beef output value results.
While fertiliser is, on average, 15-18% cheaper this year relative to 2015 and ration prices are back 5-10% in many places, 2016 will be a tough year for beef finishers. These continue to be the two big variable costs (right) on livestock farms and getting the most from them is crucial to system profitability. Efficiency within the farm walls has never been more important.
Listen to a discussion on current beef prices and tips to adapt your winter management to market conditions in our podcast below;
Listen to "Beef prices under pressure" on Spreaker.
Ask yourself
The key to efficiency is measurement. Scrutinise farm outgoings and animal performance – do they add up? How do your spends on feed and fertiliser compare with those presented (right) for the country’s top farms? Being numerically lower is not necessarily an excuse for celebration. These top farmers’ chequebooks might be active, but the investments are generating worthwhile returns in the form of output. Look at ratios between the top farms’ variable costs and beef output – aim to keep your gross margin/gross output ratio as far below 60% as possible. Sure, constraints such as land type and an off-farm job might be preventing big output jumps on your farm, but could your individual animals be doing better?
While it might seem late for looking back on farm performance in 2015, now is the time for drystock farmers to think about completing a 2016 profit monitor. As aforementioned, the average drystock farm is not financially viable. Indeed, the first e-profit monitor that a farmer completes is usually a sobering experience. But, it puts farm inefficiencies in plain view and is often the motivational kickstart that many need. Most of the physical farm data is attainable from ICBF Herdplus and the financials are recorded for farm accounts anyway. Talk to your advisor and get the monitor wheels in motion.
The e-profit monitor is a Teagasc-developed benchmarking tool that measures the performance and production efficiency of a farming enterprise. The 2015 analysis includes figures from 553 beef farms and 137 sheep farms, compared with 924 and 191 beef and sheep farms in 2014 respectively. Here, the top third of e-profit monitor drystock farms, based on bottom line, are examined.
Taking into account average farm and flock sizes, the top 1/3 of suckler beef, suckler to weanling and beef trading farms achieved net profits of €33,822, €7,119 and €26,851, respectively. The top lowland sheep flocks produced a net profit of €8,487. These figures do not include premia (BPS, GLAS, BDGP, AEOS, etc.), though these are presented below.
Comment
The Teagasc National Farm Survey, a separate entity to the e-profit monitor, tells us that the average beef farm system is losing money. Yet those in the upper echelons of the e-profit monitor analysis have established sustainable, profitable farm systems. What is the difference?
Two things: output and efficiency. Take the example of suckling to beef: stocking rate on the top farms is at 2.4 LU/ha – the national average is 1.29 LU/ha. Beef output per hectare on these top farms is up at 882kg/ha – the average farm produces 400kg/ha. Even on an individual animal basis, the top farms according to this data are producing 368kg/LU every year. The national average suckler cow is producing just 304kg annually.
What this proves is that output generation is not all about heads on the ground – big output gains are possible at individual level too.
2014 versus 2015
Relative to 2014, net profits on the top one-third of suckler beef and store-to-beef farms increased by 101% and 43% in 2015. A strong beef price for most of 2015 and weak live prices in 2014 were the principal drivers for these increases in profit. In contrast, net profit on the top third of weanling/store-producing decreased by 6% in the same period. However, gross margin actually increased by 17% on these farms during the same period – the dip was driven by growing fixed costs on the farms recorded. On the country’s top lowland sheep farms, net profit in 2015 was up by 12% on the previous year. Higher slaughter weights and a reduction in the amount of replacements retained contributed to the increase, as well as a slight reduction in variable costs.
Reality check
We cannot deny the facts: 2016’s beef price has been lower than 2015 at all points since January. This will undoubtedly hit this year’s beef output value results.
While fertiliser is, on average, 15-18% cheaper this year relative to 2015 and ration prices are back 5-10% in many places, 2016 will be a tough year for beef finishers. These continue to be the two big variable costs (right) on livestock farms and getting the most from them is crucial to system profitability. Efficiency within the farm walls has never been more important.
Listen to a discussion on current beef prices and tips to adapt your winter management to market conditions in our podcast below;
Listen to "Beef prices under pressure" on Spreaker.
Ask yourself
The key to efficiency is measurement. Scrutinise farm outgoings and animal performance – do they add up? How do your spends on feed and fertiliser compare with those presented (right) for the country’s top farms? Being numerically lower is not necessarily an excuse for celebration. These top farmers’ chequebooks might be active, but the investments are generating worthwhile returns in the form of output. Look at ratios between the top farms’ variable costs and beef output – aim to keep your gross margin/gross output ratio as far below 60% as possible. Sure, constraints such as land type and an off-farm job might be preventing big output jumps on your farm, but could your individual animals be doing better?
While it might seem late for looking back on farm performance in 2015, now is the time for drystock farmers to think about completing a 2016 profit monitor. As aforementioned, the average drystock farm is not financially viable. Indeed, the first e-profit monitor that a farmer completes is usually a sobering experience. But, it puts farm inefficiencies in plain view and is often the motivational kickstart that many need. Most of the physical farm data is attainable from ICBF Herdplus and the financials are recorded for farm accounts anyway. Talk to your advisor and get the monitor wheels in motion. 
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