Sheep Farm Monitor is a benchmarking project that aims to provide the industry and Government with accurate and timely information on farm profitability.
By knowing key production and financial data and comparing it to that of previous years and other operators, farmers can see where improvements for their business may come from.
This is one of the main aims of the Sheep Farm Monitor Project, which is conducted through the Department of Primary Industries with support from BESTWOOL/BESTLAMB.
About 70 producers across the three regions; Western Victoria, the North-North East and Gippsland provide anonymous production and financial information, which is collected via private contractors that is in turn compiled and analysed by DPI Farm Business Economists.
Information such as animal liveweights, sale prices, opening and closing stock numbers, kilograms of wool sold and costs are some of the detailed information farmers are willing to provide.
In return figures such as kilograms of lamb or wool produced per hectare, the cost of production, return on assets and equity are some of the detailed results generated from the analysis.
One farmer who says he has benefited greatly from being involved is David Reed from Sale.
Running Merino sheep and Angus cattle, Mr Reed knows his cost of production and says he is in tune with his business.
“The farm monitor program has forced us to be very much in touch with what is working in our operation and what needs improving.
"It has got nothing to do with what others are up to and how much money others can make, I really don’t care about that but knowing what your costs are allows you to make good business decisions when the opportunity arises.”
Stock & Land spoke with Mr Reed as he was taking stock to market.
The Sale area has received less than half the normal rainfall so far this growing season.
“Knowing my costs and what I can get for the stock means I can hopefully make the most of situations.
"Mind you, selling stock like this is hopefully going to be the wrong move when we get four inches of rain,” he joked.
While benchmarking your production is something that can be done without being involved in such a monitor program, Mr Reed said working on a timeline helped him to be dedicated.
“If it was left up to me I probably wouldn’t do it so that’s why I continue to be involved.
"Just like putting together business activity statements for the GST keep us in touch with the figures side of the business, the farm monitor program helps show us what is the most profitable side of what we do.”
The information not only gives farmers the opportunity to see if their business is meeting the mark and where it can be improved but it also gives an insight into the health of the farming economy overall.
Results this year varied between the regions for both prime lamb and wool production, this being a reflection of the difficult seasonal conditions in the North and certain parts of Gippsland.
The average return on assets for the South West, Gippsland and North-North East was 3.4pc, 2.1pc and 2.4pc respectively.
The top 25pc of farmers achieved average returns of 5.1pc, 5.3pc and 7.6pc respectively.
All of these results are above that of the previous year.
Wool sheep producers in the South West, Gippsland and North-North East had an average gross margin per hectare of $223, $243 and $123 respectively.
The top 25pc of farmers respectively achieved average gross margins of $396, $453 and $195 per hectare.
These results are all above that of the previous years gross margin figures.
With regards to prime lamb production the South West, Gippsland and North-North East had average gross margin results of $316, $277 and $90 per hectare respectively.
Farmers in the top 25pc respectively achieved average gross margin per hectare figures of $517, $450 and $169.
Researchers and Policy within agriculture also use information such as this to guide future policy and research.
Comparative analysis is not exactly new or indeed unique, however the fast and timely nature of this program is one of its key strengths, with the information from it becoming available to the public just after the financial year.
Summary results of the 2007-2008 Sheep Farm Monitor Project are available on the DPI website.
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