The benefits of sharing intellectual capital in the beef industry

The benefits of sharing intellectual capital in the beef industry

Articles & Publications, Opinion Pieces
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…
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How does land condition affect property values?

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…
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Benchmarking Evolution

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…
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Beef land versus gold: Which is the better investment?

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…
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Beef productivity gains to go to bottom line

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,…
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Does genetic progress have to slow during the rebuilding phase?

Does genetic progress have to slow during the rebuilding phase?

Articles & Publications, Opinion Pieces
Michael Wellington and Karissa de Belle, Bush AgriBusiness Pty Ltd. With the current lack of stock across the country, many herd or flock managers will not have the luxury of culling that they normally would. This raises the question of how genetic progress is affected by, and should be managed in, different seasonal conditions. We have heard from some producers and advisors that genetic progress will slow during commercial herd/flock rebuilds. However, we are not entirely convinced that this is necessarily the case.  In the equation for genetic progress (see footnote 1), selection intensity (i) is affected by selection itself (how different are the new sires and breeders coming into the breeding herd from the current herd average?) and culling (how different is the herd average after culling, from the…
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Considering Goats

Considering Goats

Articles & Publications, Opinion Pieces
Karissa de Belle and Ian McLean, Bush AgriBusiness Pty Ltd Low conventional stock numbers, the current price of goats, along with their hardiness and fertility is causing many producers in rangeland areas to give them serious consideration as a potential enterprise. It will be an attractive option for many, however any enterprise choice requires careful consideration. The first consideration with goats is what sort of enterprise they will be. Will they be a managed flock1, wild harvested or somewhere in between, i.e. wild harvest with smaller ones put behind wire to grow out to killable weight. If it is simply an opportunistic harvest and immediate sale of wild roaming goats, then it is pretty straightforward, provided you have some basic infrastructure. If they are there, can be mustered, trucked and…
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Linking weather data to cattle breed adaptation

Linking weather data to cattle breed adaptation

Articles & Publications, Opinion Pieces
By Michael Wellington The introduction of Black Angus and Wagyu cattle into extensive northern Australia has been watched with keen interest. As I was required to deliver a project as part of my livestock consulting internship, I spent some time looking at differences in adaptability among breeds due to renewed interest in this space. I found that most heat stress research has focused on the feedlot and dairy industries. This is logical because these industries have some level of control over the environmental conditions cattle experience. Also, feedlot and dairy cattle are more susceptible to heat stress due to higher metabolic heat production. Conversely, beef cattle in extensive environments have greater scope to regulate their heat load through behaviours such as shade and breeze seeking. There are several heat stress…
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2030 – What is your bottom line?

2030 – What is your bottom line?

Articles & Publications, Opinion Pieces
Red Meat 2030 was recently released by the Red Meat Advisory Council (RMAC). This is a comprehensive document, which sets the vision and priorities of the red meat industry over the next decade. This document complements in many ways the NFF’s 2030 Roadmap, which sets out the vision for Australian Agriculture as a whole over the next decade. These documents are important to you as producers as they will guide industry activities and inform government policy over the next decade. They are industry owned and there has been considerable industry consultation in their development. An aspect I quite like in both documents is the prioritisation of environmental management and sustainability, particularly that they address how the industry will not only need to ensure that it has sound environmental management, but…
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Avoid Magic, opt for Science

Avoid Magic, opt for Science

Articles & Publications, Opinion Pieces
Contributed by Dr Phil Holmes and Ian McLean Unfortunately, and to its detriment, broadacre agriculture is not always an evidence-based industry at producer level. Yes, there are areas where evidence drives what is done, but it is far from universal. Too much attention is placed on fads and searches for silver bullets. By way of contrast, consider engineering. If it was not based on hard evidence, planes would fall out of the sky, buildings would collapse and bridges would cave in. It is the ultimate discipline in everyday life. But back to broadacre agriculture, specifically livestock. Fads go past the front gate of the property every day. Some of them are relatively benign and some seriously detrimental to business. There have been heaps of them. The whole Soft Rolling Skins…
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