Understanding on-farm costs helps farmers make better decisions and be more productive and profitable. Here two ANZCO farmers describe the benefits of knowing their costs.
"Understanding the costs is very important to running a successful business. We make strategic decisions from the costs shown in our budget. Doing this helps us know where we're heading and what our profit is. From here, we can look into business planning.
"We analyse our costs to see where we can reduce costs and increase profitability. After a few years of trialling, we've learnt that regrassing comes at a large cost for our business. Living in the King Country we're lucky to grow grass all year round. We get good pasture quality results from being part of this bull programme with ANZCO therefore it reiterates to us that we can maintain pasture quality without regrassing as often. We decided that it's not feasible to have an annual regrassing programme.
"We record our direct costs through FarmIQ and Cash Manager. We're still getting used to using FarmIQ but we use it daily especially when it comes to recording stock movements and buying and selling of stock. We find it's really efficient for keeping records in one place and easy to use as you can enter the data on your phone while you are away from the computer.
"Recording costs used to be onerous but with technology quickly improving, it makes collating our costs easy.
"In our system we run a number of bulls in different ages classes. Bulls can create increased maintenance costs but they're very important to our system in terms of feed quality and faster finishing.
"We're really interested in our indirect costs. For example we look at our opportunity and interest cost when we're looking to invest in something. When investing in something, we try to calculate how much will it cost us to run it or in terms of cattle, we want to know how much it will cost us to finish the animal. We're looking forward to getting the cost analysis data from this programme.
We understand how important it is to understand our costs but want to improve how often and how in depth we analyse them."
"My focus is on maximum pasture production every day. It's a bit like the saying you have to spend money to make money. By understanding my costs I learn to spend wisely but ensure I get the best bang for my buck.
"By doing all our spreading, spraying and ag work ourselves, we can control quite a few of the variable costs. I also look at simplifying things as much as I can.
"I focus my expenses on to soils and pastures to make sure nothing is restricting the pastures from their maximum growth given the climatic conditions. You get back what you put in and it's important to try to control all the variables you can. There's no point worrying about the things you can't control (climate, weather etc).
"I soil test every couple of years to ensure the fertiliser application is efficient. I work the bulls to certain areas of the farm to see which bulls do better on different grass species so I can monitor and learn. Bulls are a commodity but provide flexibility to my system which is important."