Stephen Dummett, Author at Bush AgriBusiness Pty Ltd

27Jul 2020 by Stephen Dummett

The benefits of sharing intellectual capital in the beef industry

By Ian McLean and Phil Holmes We believe the management of capital is an issue for the beef industry. The returns on financial capital are insufficient, environmental capital needs preservation and intellectual capital is undervalued. While all aspects are important; we will focus here on intellectual capital as it influences the management of the other two. Within the context of pastoral business management, we have defined intellectual capital as the hard-won knowledge that smart producers have learnt from their peers and predecessors about profitable pastoral production, along with their own experience and knowledge gathering. It is distinct from intellectual property which is more about a breakthrough in understanding due to a completely new way of looking at issues. Managing a modern pastoral business is a multi-disciplinary vocation, requiring skills in…

16Jul 2020 by Stephen Dummett

How does land condition affect property values?

Articles & Publications, Opinion Pieces

By Ian McLean THE answer to this question depends a lot on how you define ‘value’. We are referring primarily to the intrinsic economic value of a property, as opposed to the value placed on it by the market. A previous article on ‘Beef land vs. Gold’ discusses different approaches to valuation. The intrinsic economic value of an asset is essentially its value based on its future earning capacity, which means that land condition has a big effect. There are four categories of land condition recognised in northern Australia: ‘A’ for good condition, ‘B’ for fair, ‘C’ for poor and ‘D’ for very poor. This report-card style classification is determined by the health and functioning of the pasture and soil components of the area being assessed. Land in poor (‘C’) condition…

09Jul 2020 by Stephen Dummett

Benchmarking Evolution

Articles & Publications, Opinion Pieces

By Phil Holmes Farm business benchmarking first appeared in Australia over 40 years ago, starting with the cropping industry. The livestock industry soon followed with the Victorian DPI Monitor Farm Study being, arguably, the first serious attempt in the early 70's. It is still there today. By today's standards those early versions were rather simplistic, but you have to start somewhere. Increased knowledge and experience have made significant contributions to the process over time. I have been very fortunate to have had three great mentors in the early years of my career and I would not have had the career fulfilment that I have enjoyed without them. One of them was a Cooma NSW based entrepreneurial accountant, Mick Boyce who was always looking for ways to add value to client relationships. Mick…

19Jun 2020 by Stephen Dummett

Beef land versus gold: Which is the better investment?

Articles & Publications, Opinion Pieces

By Ian McLean Comparison of price of gold and rural land in Australian dollars (real) It would appear to us that agricultural land has some key characteristics in common with gold. The main ones being; It is a finite resource and is valuable, primarily, as a result of scarcity.Typically, both have very low yields (zero or less in the case of gold). The first of these characteristics, combined with an uncertain global economic outlook, has contributed to an increase in the prices paid for agricultural land in Australia. This has been a double-edged sword; the upside is that it has increased the wealth of those who own land; the downside is that, with no corresponding increase in profits, it reduces the returns on capital. Analysis of historical data indicates that…

15Jun 2020 by Stephen Dummett

Beef productivity gains to go to bottom line

Articles & Publications, Opinion Pieces

A new playing field in the beef game where returns for cattle are matching or beating increases in costs is opening the door for solid profitability boosts where productivity can be improved. Those able to make prudent and ongoing investments in productivity will capitalise most on the new dynamics. This is a major takeaway from one of the cattle industry's key pieces of analysis, The Australian Beef Report: 2020 Vision, due to be released this month. An independent assessment of the financial and production performance of family-owned beef businesses in Australia collated by long-serving consultants Phil Holmes and Ian McLean, the 2020 report follows the first version released three years ago. The initial version touched on the fact that declining terms of trade in agriculture, known as the cost-price squeeze,…

08Aug 2018 by Stephen Dummett No Comments