Financial strategy gives Hills the edge
13 March 2024
Eustie and Hannah Hill with their daughter Sophie.
Managing a family partnership means the numbers need to add up for Queensland cattle producer Eustie Hill.
Together with his brother George, Eustie runs the ‘Tooloombilla Partnership’ – a family-owned cattle enterprise that encompasses three properties covering more than 35,770 hectares in southeast Queensland’s Maranoa region.
Eustie and his family live on ‘Boondee’, a 2,200ha property near Meandarra, while his brother’s family are based at Tooloombilla Station north of Mitchell, and a manager runs the third property south of Mitchell.
A breeder/backgrounder operation, the partnership runs 5,000 adult equivalents (AE) of a shorthorn Santa Charolais and Black Angus crossbred herd.
With a focus on the heavy feeder market, the enterprise’s steers and surplus heifers from the Mitchell properties are sent to Boondee for backgrounding (on improved pastures in summer and multispecies crops during winter), then trucked to feedlots in the Darling Downs.
Learning the value of numbers
Eustie said the industry was rapidly changing and it’s important for producers to get off farm occasionally to expand their business knowledge with extension programs such as the MLA-supported Business EDGE seminars.
“Doing these courses gives you the confidence to go home and progressively implement new skills and ideas,” he said.
“Even something simple like learning how to record, read and understand financials can be a challenge to begin with,” he said.
“As producers, we are running big businesses worth a lot of money so it’s important that we learn the skills needed to support sustainable enterprises.”
“Understanding your numbers will hold you accountable for every decision and help ensure you are creating a business that is financially sustainable in the long term,” he said.
Unlock the power of numbers
Benchmarking the partnership’s three properties against each other has allowed Eustie to see how they perform individually and, over time, identify some of the issues around scale and labour efficiency.
“There is huge power in looking at our properties individually,” Eustie said.
“Benchmarking them separately over the past decade has not only helped us better understand their performance, but it has also challenged some long-held misconceptions.”
By looking at the individual numbers, Eustie could see that what the partnership had always thought was its cheapest breeding country was in fact its most expensive in terms of cost of production ($/kg liveweight produced).
“We could see from the benchmarking that our cost base remained stable across each property, regardless of the number of AE we ran, but the property we’d thought was the cheapest wasn’t producing enough kilograms of beef to absorb that cost base effectively. That’s something we wouldn’t have known had we kept running the numbers as a single enterprise.”
“Benchmarking individually means we’re no longer relying on guesses or preconceived ideas to make decisions. Instead, we’re now able to use evidence to identify real problems of scale and labour efficiency within the business and then work on finding solutions.”
Create a sustainable business
Eustie said the business looks at both the financial actuals and forecasts every three months, which allows them to manage cash flow throughout the year.
“That allows us to keep a close eye on the number of cattle we’re selling and then restructure our expenses, if necessary, or even reconsider our capital expenditure in the long term,” he said.
“We’re looking at expanding the business by increasing our existing breeder area or backgrounding area (or a combination of both), which is exciting. But it also has its challenges, so we’re focused on managing the land we already have more effectively with things like pasture improvement trials, putting in more paddocks and watering points.”
Eustie said there are opportunities everywhere in ag, but you have to be in the position to take them when they arise.
“The key for us is to manage and focus on what is within our control, like Cost of Production. Benchmarking lets us see how each property is performing over time and whether our strategies are improving scale, labour efficiency and operating return across the business.”
