Decision Time Looms For Marlborough Farmer

From the Foundation for Research, Science and Technology

October 19, 1999

MEDIA RELEASE

For immediate release

DECISION TIME LOOMS FOR MARLBOROUGH FARMER

The first weekend of November will be decision-time for Marlborough farmer Kevin Loe. According to his self-imposed deadline, Mr Loe will have decided by then whether his farm near Ward has enough grass to carry his stock through to Christmas.

It's what Mr Loe does every year, setting a critical time to act if rain hasn’t fallen. If there isn’t enough grass or rain to grow it, he removes stock from the farm by selling or grazing off.

In some ways the decision this year might well be made for him because it has been a dry spring so far.

However, an investment by Technology New Zealand in the know-how of a Hamilton firm has helped take the guesswork out of Mr Loe's deliberations. Cogent Farming Business Systems Ltd has developed prototype high-tech software that links farmers with Cogent, analyses their data and provides them with precise calculations. For example, it tells them how much profit they are making each day from each animal, each type of stock and each farming activity. This helps farmers make decisions based on profit, rather than production.

The now-completed computer program is called Camras (Cogent AgriBusiness Management Recording System) and was the brainchild of farm consultant Peter Floyd. Technology New Zealand, an arm of the Foundation for Research, Science and Technology, invested in the system to help boost farming profitability.

Farmers who are part of the Cogent network record information such as daily rainfall, soil temperatures, stock numbers, and the weights and conditions of animals, which they supply to local franchised "facilitators" throughout New Zealand. These people use Camras to dispatch the details over the Internet to Cogent's computer in Hamilton.

Camras is a key part of the "Cogent Process" – a new, holistic approach to strategic management of farm businesses. Mr Loe relies on the process, which he has been using for three years, whenever he makes important decisions.

“I looked for something that wrapped up the whole business as an enterprise. We’re all told we need to do the swot analysis [strengths, weaknesses, opportunities and threats] – but we don’t do it. Cogent makes you do a business plan and review what you’re doing."

The recording is a discipline and the details are stored.

"In the old days farmers used to write down everything on cigarette packets – prices, stock numbers – cigarette packets were everywhere, and they usually got lost," he says, noting, however, that he has not smoked since he was 23. "Now we record everything on Cogent and let it do the sums, including budgets."

He says that before Cogent he used to get excited about production. "But not now. . Production isn't everything. Profit is the key and now I can identify strengths and weaknesses and adjust accordingly."

Cogent allows Mr Loe to plot animal values. "I think in terms of weight, not numbers. When I fill out the Cogent green data sheets I don't put in what I think an animal is worth. I look at what the market is going to be worth for that class of animal in cents per kilogram for each month of the year, for as far ahead as you want to look. Then I set my target weights for each class of animal and try to pick the ideal time to sell. Then I plan accordingly."

Mr Loe and his wife, Carol, record the total market value of livestock each month, "and that enables us to unload early and buy early".

The Loes farm three properties. They have 1330ha at The Homestead, which has been in their family since 1905 and which was once part of Flaxbourne, the first of the South Island's huge sheep stations. Another property has 340ha, which they own with a farm worker, and they lease 500ha in the Awatere Valley.

During the past three years they have run an average of 385kg of livestock per hectare (with a low of 250kg in January/February 1998 and a peak of 450kg in March/April 1999). They run about 7500 sheep and up to 900 cattle.

"The Cogent Process looks at the whole businessand gives me better control of what I already do."

Although, he says wryly, he can still get it wrong. "Earlier this year, while we were still recovering from a drought, I bought when prices were low. I thought it was a good idea, because post-drought price would be high. And not having an autumn, I held on to them for a bit too long.

"Cogent was saying 'sell', but I gambled and carried on. About July I hit the wall. We had to bail out of a lot of stock, fortunately at higher prices per kg, but at much less than target weight. Had we had an autumn and the rain, the drought would have been a blip on our radar."

And now this summer is shaping up for another drought.

“I find that September is the longest month in farming. August and September have been two of the driest months of the yearwhich makes October critical to avoid a drought this year worse than last year.”

So Kevin Loe will decide early next month how he will weather yet another drought, combining experience and high technology.

"And useful as Cogent is, it will never replace stockmanship," he says. "In the end, we still grow grass and turn it into animals with the intention of making a profit."

By using the Cogent Process and Camras, Mr Loe and many others like him are turning that intention into reality.

Caption: Should they stay or should they go? Marlborough farmer Kevin Loe uses hi-tech information to help him consider the options for his stock.

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Contact:

 Peter Floyd, Cogent AgriBusiness Facilitators Ltd, 1048E, SH1, RD3, Tamahere, Hamilton. Ph: (07) 856-3484, (025) 968-796, 0800 COGENT (264368). Website: http://www.cogent.co.nz Email: cogent1@xtra.co.nz

 Tony Hadfield, Technology New Zealand(Christchurch Office) at The Foundation for Research, Science and Technology, (03) 377-9340 or 025 454 095 Website: www.technz.co.nz

Prepared on behalf of The Foundation for Research, Science and Technology

by I.D. Communications. Contact: Ian Carson (04) 477-2525.

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