No need to simply blame the weather

01-04-2007 | Barrie Ridler

Within any system there is an inter-dependence between the component parts.

It seems obvious that:

• the amount and quality of pasture grown will have an influence on the number of stock able to be fed.

• the type and productive ability of these stock will then have an effect on how well this feed is utilised, both in a physical sense (utilisation) and an economic sense (“profit”).

• how well these relationships interact determines the efficiency and sustainability of the overall system.

• how changeable or durable the components and relationships are determines the risk inherent in each system.

Because all components and relationships are subject to change, outcomes will vary in a dynamic way.

These outcomes cannot be predicted by measuring, averaging or comparing past performance across different farms.

A dynamic reproduction of the actual farm system that allows timely substitution of different components (both in type or quantity) is needed. Essentially this is like having a “transparent” farm system rather than an unknown “black box”.

Strangely, many farms keep to similar patterns of resource-use despite large swings in conditions. This may make decision-making easier – by the time you notice, there are no options left – but it also destroys the ability to profit from what may be an early simple change.

A current example could be the highly stocked dairy farm which continues to feed supplements and plans urea applications as pasture dwindles in a drier summer.

There are numerous options — substitutes — for existing policy.

A few obvious ones may be:

• grazing stock away if not already done.

• a cheaper supplement (cents/MJ ME and utilisation accounted for).

• once a day milking.

• drying cows off.

• dry off cows and cull.

• start planning a sustainable and more profitable system for next season.

Historical records give little guidance on which of these to implement.

However if the actual system can be replicated in a dynamic way, the best option can be determined.

Profit may be the final objective. Using a technology that allows the best combination of resources for the current and predicted short and long term circumstances is superior to historical figures.

The clear message from dairy farm analysis has been that the stocking rates are way above the point where additional costs are covered by additional return.

This same methodology can be applied to sheep and beef farms and has been the basis of my articles over the past months in Country-Wide.

Many sheep and beef systems are now also suffering from the “more production equals more profit” malaise that dairy farms have hit the wall with.

This may take the form of increased stock demand requiring more purchased feed (nitrogen, crops, grazing, specialist pastures) and much higher levels of management and systems support.

Instead of questioning the flawed analysis that has resulted in this overstressed state, many will just blame the weather.

What dairy farmers have failed to recognise previously is that high cost, high maintenance systems cannot survive without continual adaptation if farm gate prices for product decrease and input prices continue their inexorable climb. More production is not now the answer.

What many farmers are also about to find out is that capital gain and high economic farm surplus are no guarantee that the bills will be paid. For that you finally need cash.

This means that a better awareness of resources available and their best use in needed.

So any business should be aware of the importance of forward planning in a predictive systems manner, rather than using a fixed assessment method.

A dynamic system that can substitute inputs and management options to best utilise present resources and conditions is required.

This allows an ability to substitute, alter and think about a farm as an interdependent system where any change will flow between present resources and alter future responses, rather than an historical analysis locked into prescribed time slots.

New concepts in how to model farms now provide unprecedented insights into how outcomes

evolve.

This is because the relationships and options available can be simulated in a dynamic way. It is the new way to plan and predict any business but requires a change from the purely production orientated analysis that has prevailed.

As one farmer said recently “systems modelling is a new way of thinking, but I have discovered it is the right way to be thinking”.

As climatic and economic conditions vary into the future, it should become clear that new options are needed. And a change in career may be an option that most farmers would rather not contemplate.

Barrie Ridler is a King Country farmer and lecturer in farm management at Massey University. He can be contacted on 06 845 3808 or 2bjr@xtra.co.nz

  Printable View