Identifying the barriers to profitable beef production
The Australian Beef Report is a valuable, independent study of the Australian Beef Industry that will open your eyes. Ian McLean and Phil Holmes have identified that the industry can be effectively broken up into two groups, the Best and the Rest. They have also identified that there are only 2 basic barriers to profit, and how to address these barriers is spelt out very clearly in this report.
Where does your beef business sit? Are you one of the Best or the Rest?
The Best are generating healthy profits that, after a reasonable wage has been paid to the owners working in the business, are able to pay interest and have funds left over to repay debt, fund expansion, fund retirement, provision for succession and future downturns. They comprise only 25% of the industry, but they manage close to half the herd and land area.
The Rest are not generating sufficient returns to be able to pay both their owners a reasonable wage and pay interest. There are no, or very limited, funds available for debt, expansion, retirement or provisioning.
Many years of Ian and Phil’s combined industry knowledge, along with some very tedious data analysis, have been succinctly collated into this very easy to read publication to help you discover the strengths and weaknesses in your own beef business. The Australian Beef Report was written to allow you to make the necessary informed business decisions and help you arrive at your own business and personal goals sooner.
The Australian Beef Report with its evidence-based recommendations on how to improve your business performance, will be a valuable resource for all in the industry, including those who service the industry in the form of banks, accountants, consultants, and advisors. When you purchase the Australian Beef Report you will also get exclusive access to a range of online resources and decision support tools for your private use.
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Australian Beef Report today!
About the Authors
B.Sc. (Vet), B.V.Sc., M.A.C.V.Sc., F.Fin., Ph.D.
Phil is the principal of Holmes & Company, a NSW based firm providing professional advice to family and corporate owned farm businesses in all states of Australia.
He started his career in sheep, but over time, has become more involved with beef and now has a good understanding of how sustainable beef production works nationally. Phil’s special interests are commercial beef, sheep and wool production, agricultural sustainability, finance and sensible wealth creation through investing. He is a hard line disciple of the ‘evidence-based’ school of thinking and strives to have that approach dominate debate on Australian agricultural issues.
Phil was one of the pioneers of agricultural bench-marking within Australia and has contributed significantly to the understanding of profitable pastoral production across Australia. Whilst the majority of his professional experience is in southern Australia, his PhD examined the sustainability of beef production in the arid rangelands. The fundamental research question was ‘Is it possible to concurrently achieve financial and environmental sustainability in the arid rangelands as a beef producer?
Assoc. Deg. Comm., M.A.I.C.D., M.B.A
Ian is the principal of Bush AgriBusiness, a QLD based firm providing professional advice to family and corporate owned pastoral businesses in northern Australia.
He was raised on a property near Mitchell (QLD) and after graduation spent time in the Northern Territory in a number of professional roles. Ian’s special interest is the overall
performance of beef businesses from family-owned through to corporate scale. He is a ‘sustainability’ advocate across the board and is passionate about the preservation of rural landscapes in the pursuit of profitable grazing animal production.
Ian helped develop the current MLA BusinessEDGE course and has since delivered it to over 400 northern beef producers, in an unsubsidised environment.
$10 from the sale of every Australian Beef Report will be donated to beyond blue, as the mental health impact of financial stress in rural Australia is real and requires support.
Unless you are completely satisfied that the Australian Beef Report has helped grow your knowledge and understanding of profitable beef production, your investment will be refunded in full.
It is all too tempting for agricultural consultants and scientists to focus exclusively on their area of interest without always and fully recognising that livestock farms are businesses that need to return a profit for their owners.
In this report, Phil Holmes and Ian McLean have taken a wide lens to assess the profitability of Australian beef businesses through a number of analyses that have highlighted production efficiency and its performance in relation to invested capital. Their primary data sources are sound and well recognised within industry and their methods of analysis are appropriate for the task of identifying financial performance as related to production and investment.
The authors have carefully explained the data in a comprehensive manner that identifies some major concerns for the Australian beef industry, in terms of enterprise profitability. Importantly, they have combined the results from the analyses, with their own experience working with beef producers across the country, and provided a number of approaches for beef producers to consider in order to improve the profitability of their businesses.
My congratulations to the authors of The Australian Beef Report. I have read and strongly endorse its strikingly pragmatic findings. The highly respected authors have presented a deeply analytical document, showing “no fear or favour” to any sector of industry.
The report may not be to the liking of some but it clinically defines many of the undeniable economic truths of the industry. It supports the endeavours of those who aspire to be the best and offers well researched pathways for improvement, to those who choose to treat beef production as a business.
The Australian Beef Report is a valuable – albeit sobering – analysis of the state of financial performance in the Australian beef industry since 2004-05. While it would be easy to be swept-up by the recent headlines and puffery that accompany record commodity prices, the reality is that, for most producers (75%), the financial foundations of the beef industry are far from solid – this has ramifications for the longevity and sustainability of beef production in Australia.
Fortunately, the Australian Beef Report points to the admirable performance being achieved by the industry’s best, and clearly outlines where many in the industry are falling short in our profitability credentials. The challenge now lies in implementing strategies and tactics to address the causes of poor industry profitability, in rate-limiting order.
I commend the Australian Beef Report for its ‘warts and all’ assessment of the challenges faced by the Australian beef industry, and encourage readers to embrace the opportunities to improve our bottom-line.
- Australian Beef Report by Jo Bloomfield