The new year is a good time to reflect on where the farm business is and where it is going. To steer things in the right direction, it is important to know where the farm is at the moment in terms of finances and performance.
Things like stocking rate, output in kg/ha, output per LU, variable costs, fixed costs and net margin are all important methods of assessing performance.
Simple
A useful tool that combines both physical and financial performance analysis is the Teagasc e-Profit Monitor. It is relatively simple to fill out with a dedicated input sheet for each enterprise.
Much of the animal data can now be downloaded from the ICBF website which just leaves the financial data to input.
Your local Teagasc adviser will help out in completing your profit monitor. More importantly, when completed, arrange to sit down and look at where the improvements need to be made and where to start. Complete this as early as you can in January.
Your local Teagasc adviser will help out in completing your profit monitor
Making plans to implement changes in June will not reap the same rewards. I have outlined below a few simple steps to completing a profit monitor in 2019.
Step one: contact your Teagasc adviser
Do not wait for the Teagasc adviser to ring you asking to complete a profit monitor. Take the initiative in 2019 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 two: retrieve information
Direct payments can be retrieved from 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. A profit monitor report can be printed off and data transferred to the input sheet. Private sales will not be included in this report, so it is 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 go through your invoices for the year.
Step three: input data
Once the input sheet is complete, you can either input the data yourself online or by bringing the sheet to your Teagasc adviser to for them to do it. A half-hour is generally sufficient time to input a profit monitor on the online system.
Several useful reports can then 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 should not be analysed in isolation but rather analysed taking in a number of years' performance.
Step four: analyse data
Once you have input the data and reports have been printed off, take some time studying reports on your own, making sure 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 five: decide what has to change
There is no use in going to the trouble and effort of completing a profit monitor if change does not happen. List five things that you will try to change in 2019. For example:
1. Drop rented land.2. Increase cow numbers.3. Increase weight gain and finish more off grass.4. Make better quality silage and reduce concentrate bill.5. 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 the system and why some people achieved more than others.
Granted, this could be classified as some people’s worst nightmare, but these groups seem to be making some real progress on an annual basis. This probably only works in a long-established group where farmers are very comfortable to talk openly about sometimes sensitive financial data.
The new year is a good time to reflect on where the farm business is and where it is going. To steer things in the right direction, it is important to know where the farm is at the moment in terms of finances and performance.
Things like stocking rate, output in kg/ha, output per LU, variable costs, fixed costs and net margin are all important methods of assessing performance.
Simple
A useful tool that combines both physical and financial performance analysis is the Teagasc e-Profit Monitor. It is relatively simple to fill out with a dedicated input sheet for each enterprise.
Much of the animal data can now be downloaded from the ICBF website which just leaves the financial data to input.
Your local Teagasc adviser will help out in completing your profit monitor. More importantly, when completed, arrange to sit down and look at where the improvements need to be made and where to start. Complete this as early as you can in January.
Your local Teagasc adviser will help out in completing your profit monitor
Making plans to implement changes in June will not reap the same rewards. I have outlined below a few simple steps to completing a profit monitor in 2019.
Step one: contact your Teagasc adviser
Do not wait for the Teagasc adviser to ring you asking to complete a profit monitor. Take the initiative in 2019 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 two: retrieve information
Direct payments can be retrieved from 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. A profit monitor report can be printed off and data transferred to the input sheet. Private sales will not be included in this report, so it is 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 go through your invoices for the year.
Step three: input data
Once the input sheet is complete, you can either input the data yourself online or by bringing the sheet to your Teagasc adviser to for them to do it. A half-hour is generally sufficient time to input a profit monitor on the online system.
Several useful reports can then 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 should not be analysed in isolation but rather analysed taking in a number of years' performance.
Step four: analyse data
Once you have input the data and reports have been printed off, take some time studying reports on your own, making sure 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 five: decide what has to change
There is no use in going to the trouble and effort of completing a profit monitor if change does not happen. List five things that you will try to change in 2019. For example:
1. Drop rented land.2. Increase cow numbers.3. Increase weight gain and finish more off grass.4. Make better quality silage and reduce concentrate bill.5. 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 the system and why some people achieved more than others.
Granted, this could be classified as some people’s worst nightmare, but these groups seem to be making some real progress on an annual basis. This probably only works in a long-established group where farmers are very comfortable to talk openly about sometimes sensitive financial data.
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