MAKING small changes is the key to making a huge difference to the profitability of your business, according to Icon agriculture consultant Andrew Ritchie.
Speaking at last week's Sheep Easy field day, Mr Ritchie encouraged farmers to make small five or 10 per cent changes to any one part of their business outputs, as the result flowed through to huge improvement in growers' bottom lines.
"I don't expect clients to make a 50pc change over a year because it's unrealistic," he said.
Mr Ritchie said five or 10pc changes, could make huge differences to farm business profit but said to do this growers needed to know their business status at the time.
He said if growers didn't have an understanding it became very hard to make important direct changes and people ended up with a scatter gun approach, making zero change on 100pc of issues.
"The differences between the bottom and top sheep producers in profits are usually the five per cent changes they make here or there, because they all add up," he said.
Looking back over the last 14 years of involvement in agricultural consulting, Mr Ritchie said things had come a long way especially in long term sheep performance.
"Historically where we are at, the output for dry sheep equivalent (DSE), which is expressed as a gross margin, in the form of income minus variable costs, is forecast to be about three times what it used to be about 10 years ago," he said.
"At the moment this is massive money in the face of extremely difficult conditions."
He said profits for livestock trading were now worth almost 50pc more than they were 10 to 15 years ago and although the meat and wool markets were slightly deflated, he reminded growers they were still at good numbers.
Mr Ritchie said with higher prices for livestock, growers should be thinking about doing things differently compared to when prices are lower.
"If we're changing revenue opportunities you also need to change management opportunities and skills," he said.
Mr Ritchie said when canola was $800 a tonne for a brief period a few years ago, growers would have thrown the cheque book at their crop and were prepared to invest in it more, in order to capture some of the potential profits, such as paying for extra nitrogen, potash or contract swathing.
But when the same thing happens with meat and wool prices, he said growers were reluctant to make the same sort of investments in their sheep and so often missed out on the opportunity.
Mr Ritchie said growers needed to do things like keep their sheep in better condition, increase wool production and lambing rates per DSE and invest in better genetics.
"Doing things like this for your sheep enterprise, is the equivalent to buying more nitrogen for that canola crop," he said.
"It will help increase the production output of sheep flocks and will help growers capture more of the potential profits."
As well as increasing the potential profits, Mr Ritchie reminded growers that healthy sheep were much easier to manage, saved time and created fewer headaches.
p More reports from the Sheep Easy field day on page 70.
