While many commentators are advising to batten down the hatches in beef farming for 2017 in anticipation of a rough ride, we still need to take a critical look at the business every now and then to see what improvements can be made and what adjustments are needed to the farming business.
Completing farm accounts next November for 2016 is the bare minimum and, to be honest, pretty useless apart from ticking the Revenue box.
The Teagasc eProfit Monitor is a simple tool that can really help you take a financial look at the farm and how it compares with others in the country operating a similar system.
Numbers completed in the drystock sector each year are low and while Teagasc advisers could be criticised for not completing more, the appetite to complete a profit needs to come from the farmer if meaningful change is going to take place on the farm.
Benchmarking is a powerful tool and should be used to drive the business to a more profitable one. There is always room for improvement. Time, effort, motivation and knowing the answer anyway are all lame excuses – the first profit monitor is probably the hardest to complete and after this, it’s pretty straightforward.
Most farmers will do the same as usual and hope it won’t be as bad as they say or hope that things will get better.
Astute farmers will realise that they are the only ones that can help themselves and take action.
The eProfit Monitor not only compares financial data, but also looks at physical data for comparative purposes as well.
Step 1: Ring your Teagasc adviser
Don’t wait for the Teagasc adviser to ring you asking to complete a profit monitor; take the initiative in 2017 and pick up the phone and organise it. Set up a quick appointment or, if you have completed a profit monitor before, get them to post out an input sheet or download it from the Teagasc website. Once you have your input sheet, a lot of data can be retrieved quite easily.
Step 2: Retrieve information
Direct payments can be retrieved from www.agfood.ie quite easily. Just go to the payments screen. Animal sales data, weights, carcase weights, etc, can all be downloaded from the ICBF system very easily.
A profit monitor report can be printed off and data transferred to the input sheet. Private sales won’t be included on this report, so it’s important not to forget about them.
Variable costs are probably the most time-consuming exercise, depending on the number of dockets and invoices. Have a simple sheet with the key headings such as meal, fertiliser, vet, etc, and just go through your invoices for the year.
Step 3: Input data
Once the input sheet is completed, it can be inputted either by yourself online or bring the input sheet to your Teagasc adviser to input on the system – half an hour will generally be all it takes to input a profit monitor on the online system.
Once inputted, several useful reports can be printed off for comparison purposes. Some of the most interesting reports compare year-on-year performance and indeed Teagasc specialists would advise that any profit monitor shouldn’t be analysed in isolation but rather by taking in a number of years’ performance.
Step 4: Analyse data
Once the data has been inputted and reports have been printed off, take some time to study reports on your own, making sure you understand everything and that everything makes sense.
Once this is complete, arrange a meeting with your adviser to discuss the results. How do you compare with the national average or the BETTER farms? What are the strengths and weaknesses of your farm?
Step 5: Decide what has to change
There is no use in going to the trouble and effort of completing a profit monitor if change doesn’t take place. List five things that you will try and change in 2017. For example:
Drop rented land.Increase cow numbers.Increase weight gain and finish more off grass.Make better-quality silage and reduce concentrate bill.Calve earlier to get heavier weanlings and higher sale price.Keep a note of these targets or changes and look back at the end of the year to see what was achieved and how it will affect the bottom line.
Taking it to the next level
Some of the best discussion groups in the country will have a dedicated profit monitor meeting at the end of January each year, where each profit monitor will be displayed and questions asked about each system and why some people achieved more than others.
Granted, this would be classified as some people’s worst nightmare. However, these groups seem to be making some real progress on an annual basis.
One farmer coined the phrase “it’s the fear of the January meeting that drives you to try a little harder”. This probably only works in a long-established group where farmers are very comfortable in taking openly about sometimes sensitive financial data.
Comment
In this the season of goodwill to all, the best Christmas present a farmer can give themselves is a few hours of peace and quiet to complete a 2016 profit monitor input sheet.
In my experience as an adviser, once farmers get over the hurdle of completing their first profit monitor, the smart guys recognise the importance of being able to compare their performance against fellow discussion group members and those in the BETTER Farm programme.
In our groups, some members say the results meeting in January is the most painful but necessary two hours of the year.
Mairead Kirke is a Teagasc B&T adviser in Co Monaghan
While many commentators are advising to batten down the hatches in beef farming for 2017 in anticipation of a rough ride, we still need to take a critical look at the business every now and then to see what improvements can be made and what adjustments are needed to the farming business.
Completing farm accounts next November for 2016 is the bare minimum and, to be honest, pretty useless apart from ticking the Revenue box.
The Teagasc eProfit Monitor is a simple tool that can really help you take a financial look at the farm and how it compares with others in the country operating a similar system.
Numbers completed in the drystock sector each year are low and while Teagasc advisers could be criticised for not completing more, the appetite to complete a profit needs to come from the farmer if meaningful change is going to take place on the farm.
Benchmarking is a powerful tool and should be used to drive the business to a more profitable one. There is always room for improvement. Time, effort, motivation and knowing the answer anyway are all lame excuses – the first profit monitor is probably the hardest to complete and after this, it’s pretty straightforward.
Most farmers will do the same as usual and hope it won’t be as bad as they say or hope that things will get better.
Astute farmers will realise that they are the only ones that can help themselves and take action.
The eProfit Monitor not only compares financial data, but also looks at physical data for comparative purposes as well.
Step 1: Ring your Teagasc adviser
Don’t wait for the Teagasc adviser to ring you asking to complete a profit monitor; take the initiative in 2017 and pick up the phone and organise it. Set up a quick appointment or, if you have completed a profit monitor before, get them to post out an input sheet or download it from the Teagasc website. Once you have your input sheet, a lot of data can be retrieved quite easily.
Step 2: Retrieve information
Direct payments can be retrieved from www.agfood.ie quite easily. Just go to the payments screen. Animal sales data, weights, carcase weights, etc, can all be downloaded from the ICBF system very easily.
A profit monitor report can be printed off and data transferred to the input sheet. Private sales won’t be included on this report, so it’s important not to forget about them.
Variable costs are probably the most time-consuming exercise, depending on the number of dockets and invoices. Have a simple sheet with the key headings such as meal, fertiliser, vet, etc, and just go through your invoices for the year.
Step 3: Input data
Once the input sheet is completed, it can be inputted either by yourself online or bring the input sheet to your Teagasc adviser to input on the system – half an hour will generally be all it takes to input a profit monitor on the online system.
Once inputted, several useful reports can be printed off for comparison purposes. Some of the most interesting reports compare year-on-year performance and indeed Teagasc specialists would advise that any profit monitor shouldn’t be analysed in isolation but rather by taking in a number of years’ performance.
Step 4: Analyse data
Once the data has been inputted and reports have been printed off, take some time to study reports on your own, making sure you understand everything and that everything makes sense.
Once this is complete, arrange a meeting with your adviser to discuss the results. How do you compare with the national average or the BETTER farms? What are the strengths and weaknesses of your farm?
Step 5: Decide what has to change
There is no use in going to the trouble and effort of completing a profit monitor if change doesn’t take place. List five things that you will try and change in 2017. For example:
Drop rented land.Increase cow numbers.Increase weight gain and finish more off grass.Make better-quality silage and reduce concentrate bill.Calve earlier to get heavier weanlings and higher sale price.Keep a note of these targets or changes and look back at the end of the year to see what was achieved and how it will affect the bottom line.
Taking it to the next level
Some of the best discussion groups in the country will have a dedicated profit monitor meeting at the end of January each year, where each profit monitor will be displayed and questions asked about each system and why some people achieved more than others.
Granted, this would be classified as some people’s worst nightmare. However, these groups seem to be making some real progress on an annual basis.
One farmer coined the phrase “it’s the fear of the January meeting that drives you to try a little harder”. This probably only works in a long-established group where farmers are very comfortable in taking openly about sometimes sensitive financial data.
Comment
In this the season of goodwill to all, the best Christmas present a farmer can give themselves is a few hours of peace and quiet to complete a 2016 profit monitor input sheet.
In my experience as an adviser, once farmers get over the hurdle of completing their first profit monitor, the smart guys recognise the importance of being able to compare their performance against fellow discussion group members and those in the BETTER Farm programme.
In our groups, some members say the results meeting in January is the most painful but necessary two hours of the year.
Mairead Kirke is a Teagasc B&T adviser in Co Monaghan
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