The profitability and sustainability of livestock farming is under severe pressure. Fortunately, top farmer Mecki Schneider has excellent advice for extensive cattle and sheep farmers. This is the second delivery in a three part series on ten tips for the restoration of livestock farming.
2. Profitable herds
An effective cow herd should have a weaning percentage of at least 85, says Mecki. Selection for fertility is thus extremely important.
Profit is also determined by the way in which the farmer utilises his grazing. The profit determiner is the stocking rate. Mecki calculates the stocking rate according to kilogram biomass (or live weight of the entire herd) per hectare of land. With good management, the production per kilogram of live weight per hectare should be 32-38% of the stocking rate. At a stocking rate of 30kg per hectare, the production is about 10kg live weight per hectare, which works out at R30 per kilogram (US$2,30/kg) (weaner price) on R300 production (US$22,99) per year per hectare. This is possible thanks to Mecki’s good grazing management that has doubled his carrying capacity and production.
The use of genetically superior bulls (according to estimated breeding values and economic selection indices) with excellent semen quality contributes to the herd’s profitability.
3. Keep meticulous records
Accurate record-keeping is part of Mecki’s success. A farmer needs to be aware of the required norms and guidelines in order to make timely decisions.
The main guidelines are:
- Production (in kg/ha) must be at least one-third of the stocking rate (also kg/ha).
- Weaning percentage of more than 85.
The desired growth of weaners in dry conditions should be 100-130kg from weaning to 18 months.
Mecki carefully measures the yield in kilograms of the herd’s live weight every year. The herd’s total final weight at the end of August in the current year, minus the herd’s total weight at the beginning of September of the previous year, plus sales, plus mortalities and losses (because it is produced in kilograms), minus purchases, gives the overall herd production over the year.
Lick costs are one of the biggest expenses. Measure the herd’s lick intake to determine the individual consumption per head of cattle and the lick costs per day per animal. Record the annual overall lick costs to ensure optimal utilisation.
A herd that delivers not only weaners or lambs, but also steers (oxen) or wethers, gives the farmer more flexibility because it is less vulnerable to risks and droughts. It is more profitable to produce steers when the weaner price drops to below 66% of the carcass price. If it is very dry from February to May, the farmer must reduce his livestock numbers in good time.
Graph 3 shows the seasonal price index from 2000 to 2015. It shows that there is a price difference of 9-10% between the middle and end of the year. During a drought year, there is a price difference of 40% between January and March. The sale of castrated bulls (bullocks) at 300kg in January was more profitable than weaners (220kg) during the previous August or steers (350kg) in May.
5. Financial considerations
The same financial processes that apply to any business must apply to farming. These include, among others, drawing up an annual budget and a detailed summary of income and expenses per unit (per hectare and per cow where possible). Closely monitor high-cost expenses.
Carefully calculate the farm income or net farm income. This is the total after running costs have been deducted. The net farm income should be at least 50% of gross farm income. The net profit is the net income from which rent and interest has been deducted. Capital projects should, if possible, be scaled back in difficult times.
6. Management of labour
Labour is one of the biggest production expenses on a livestock farm, but many farmers pay too little attention to it. “We must be more focused on labour management practices, and it’s not just about salaries but about human relationships,” says Mecki.
He says training is very important. A dedicated, motivated group of workers is one of the most important contributions to a successful farm. “If you give people responsibility, it’s amazing how that motivates them and then they add value to your business.”
When people are given more responsibility, it makes the world of difference to productivity.
In our next delivery Mecki discusses: Utilise and apply technology, genetic progress, value-adding, and getting involved.