Farmers Should be Profit Takers

Farmers Should be Profit Takers

Farmers can be profit makers rather than price takers but they and their financiers need to move away from production driven decision making, according to Waikato farm business specialist Peter Floyd.

"You would think that everyone would work for better profits but I am continually disappointed at the number of advisers and bank managers who talk about profitability but actually push measures that are production based," says Floyd.

"Farmers can maximise profit, but only if they have accurate ways to predict both the cost and availability of feed at different times of the year and the profitability of giving that feed to different classes of stock."

"When farmers have those figures they can work out whether they should make silage or reduce herd size, should run more bulls and fewer ewes, graze heifers or lambs, when to buy and when to sell, and so on."

Floyd believes that the emphasis on cashflow, stock units, and production per hectare leads to a mindless drive for greater production involving the high use of urea, reduced cow condition, lower conception rates and other expensive consequences.

"That is why I spent ten years developing the eCOGENT.biz process that gives farmers the information they need to make profit-based decisions. It allows farmers to take profits when they are available rather than wrap them up in plastic or waste them on low-margin stock," says Floyd.

"The key to profitable farming is very simple in concept
give the most profitable feed to the most profitable animals at the most profitable time."

Peter Floyd is the team leader of eCOGENT.biz

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Richard Bentley (B.Agr.Sc)

Award winning writer specialising in agriculture, technology, travel and humour.

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