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Auditing Stock – A crucial component

03/10/2016

Auditing Stock – A crucial component to mitigating stock losses

The recent theft of 500 dairy cows has been another harsh wake up call for the industry as farmers consider if they are taking the right precautions in protecting their second largest asset. Michael Lee, an agribusiness audit specialist at Crowe Horwath, advises how the introduction of simple systems can mitigate potential theft.

The Federated Farmers’ dairy industry chairperson, Andrew Hoggard points out if a bank was robbed there would be uproar, but police don’t tend to see stock as cold, hard cash.

Lee agrees saying, “Stock theft is extremely important for farmers as not only do they lose their capital when stock is stolen, which for a dairy cow can be up to $2,000, they also suffer the loss of revenue from that stock.”

“With the introduction of electronic identification tags (EID) individual stock can be scanned and identified.” Lee says this is one way we can mitigate stock losses. “EID can be used to reconcile back to the farm’s records. Keeping track of the records regularly also means high death rates are identified in a timely manner,” continues Lee.

On top of that Lee suggests farmers scan their animals four times a year. “Incorporating a basic schedule of scanning allows for reconciliation of numbers to ensure there are no irregularities in stock numbers.”

Lee suggests a possible stock reconciliation schedule for farmers could look like the following:
March – to establish the opening number for the season
May – prior to winter grazing
August – upon returning from winter grazing and prior to calving
October/November – post calving.
Integrating simple and achievable measures in the farming calendar could potentially alert farmers to a discrepancy in stock level. While protecting farmers from stolen stock is one of the factors this mitigates, it also allows farmers to be reactive to other problems on their farm such as death rates in calving.

ends

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