At the Young Beef Producers Forum we were also fortunate to hear from David McLean from Resource Consulting Services. David spoke about the importance of understanding your cost of production & profit in a beef operation & the importance of benchmarking yourself against others in the industry.
One interesting fact he shared was that there is no difference between the top 20% of northern beef producers and the average northern beef producer in regards to the price they receive for their product. The main differences between the average and top producers is that the higher performing farms actually have lower costs of production, less total direct costs & lower overhead costs. Another interesting finding from RCS research is that rainfall does not always influence farm performance. Although it certainly plays a role the best performing farms aren’t always in the higher rainfall areas.
This data emphasised Davids take home message - don’t underestimate your ability to control your own circumstances. Costs are one of the main factors that will determine how well your farm performs and they are also one of the factors in farming that you have some control over. He was not suggesting that cutting costs was the answer, he was suggesting that we need to learn how to manage our costs better & know how to best utilise our inputs.
David also touched on the fact that as the supply of resources around the world becomes smaller we are going to have to find new ways to do things in agriculture. He emphasised that what was profitable in the past may not be profitable in the future.