Cattle, calculators and cashflow
Location: Flinders Island, Tasmanis
Enterprise: Beef with some prime lambs and wool
Producer: Flinders IslandProductivity Group
Scott Anderson and his wife Anna run a 35,000 DSE dryland beef and lamb enterprise on two properties.
In 2002 Scott helped start the Flinders Island Productivity Group to provide continuous education and business development for local producers.
Some of the group’s members began benchmarking with Holmes Sackett and, while membership has been fluid over the years, the benchmarking group currently stands at 10 members.
“Benchmarking allows you to closely analyse your business and focus on what really matters,” Scott said.
“You basically do a cost-benefit analysis on everything you do.”
The Flinders Island benchmarking group has achieved a 1% higher average return on assets than the Holmes Sackett database average (established from data collected from clients across southern Australia), a figure Scott attributes to the group’s high production per 100mm of rainfall and land values.
“Even though we have a good range of enterprises and producers within our group, we’re probably running very similar systems now,” Scott said.
“The land prices are also lower than comparable areas in Tasmania or Victoria – we’re discounted for our perceived isolation.
“That isolation is mostly felt in freight costs which, for cattle, are about $30 to $40 more per head than producers in Tasmania or Victoria pay, but probably similar to costs faced by isolated producers on the mainland.”
Scott said the first few years of benchmarking were dedicated to ironing out the big issues in members’ businesses.
“There were big changes, such as time of calving, time of lambing, time of sale and target weights for sale,” he said.
“But after about five years you start to drill down into the overheads and the little things you can refine, such as fodder conservation through feed budgeting.
“One of the greatest things we’ve been doing in the last few years is more seasonal feed budgeting. This has allowed us all to look for opportunities, such as buying in trade cattle if the season looks right.
“Our enterprise was previously a straight breeding enterprise, but benchmarking has given us the extra knowledge and confidence to add stock trading to our enterprise mix.”
Scott first started benchmarking as an individual in 1996, but sees more value in benchmarking as a group.
Fellow member Liz Grimshaw agreed and said the group situation provided different perspectives on both technical and financial issues, and was also a source of emotional support.
Liz and her husband Michael run a 900-cow beef breeding enterprise on ‘Clifton’ and joined the benchmarking group 10 years ago.
“Benchmarking as a group is invaluable, particularly as our group doesn’t hide any figures,” Liz said.
“That openness makes it an incredible learning tool and everyone is willing at any stage to be on the phone and talk issues through.
“We also spend a lot of time visiting each other’s farms and discussing the technical aspects of farming, so it’s also about learning in action.”
Holmes Sackett Director Sandy McEachern works with the benchmarking group and visits the island twice a year.
He said participation in the group had allowed the members to build considerable business acumen, leading to more profitable businesses.
“The Flinders Island group has become close knit and all speak the same language, and they respect people who can turn a business around – they know those are the best managers,” Sandy said.
“The group has become very business focused and understand the compromises that need to be made to get a business to perform well.
“They understand the difference between achieving technical perfection and achieving the highest margin, and that is often a difficult concept for producers.”Flinders Island, Tasmanis
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