What sets top performing farmers apart from the rest of the pack?
Top farmers have many common traits, one of them being that they are generally good financial managers.
Speaking at the Business of Farming event, organised and run by ANZ, Agri Regional Manager Sean Stafford spoke about the habits of red meat farmers operating in the top 20%, and how they focused their efforts inside the farm gate, in other words – they focus on the things they can control.
The event showcased the technology opportunity for red meat farming and Cashmanager RURAL was a presenter on the day. The aim was to explore technology solutions that could help farmers build a more profitable and business.
Stafford identified eight points that ANZ’s research with the Red Meat Profit Partnership (RMPP) had highlighted set top performing farmers apart from the rest:
- Sound governance
- Use financial management systems to monitor and forecast performance
- Use of feed budgeting
- Invest to improve pasture harvest and quality
- Crops and supplements used to increase dry matter grown
- Focus on genetic selection
- Flexible livestock policy, rotating stock, weighing stock
- Proactive approach to risk management
Stafford highlighted that these farmers were consistently two to three times more profitable than the industry average, which gave them a competitive edge when it came to growing their businesses.
“They gather information and leverage resources to make informed business decisions,” he said. “Technology will likely play a bigger part in providing information to support decision making in agriculture as we move forward.”
In the current environment, it is more important than ever to improve business resilience and learning how the better performers are leveraging technology is one way to achieve this.
“They need a willingness to seek out information and resources that can support better decision making. Businesses that adapt and embrace new solutions will be able to gain a competitive edge…the solutions are already out there, we just need the curiosity to seek them out.”
Habits of top financial operators
Sheep and beef farmer and consultant at Summit Consulting, Rachel Joblin, also shared with us her observations on common habits of top financial operators:
- Undertake a SWOT analysis – what are their strengths, weaknesses, opportunities and threats?
- Have a business plan
- Have an active budget
- Monitor and review their budget regularly
- Undertake sensitivity analysis to prices and costs and investment analysis
- Share their production and financial goals with appropriate team members
- Use independent reviewers e.g. discussion groups, accountant, consultant
- Benchmark their business annually