At BCG’s Sheep Management Showcase held earlier this year, BCG CEO Chris Sounness posed the question: ‘Can counting sheep help you to sleep?’
On the back of two below average cropping seasons it was a pointed question for farmers to consider.
While it is commonly acknowledged that sheep provide valuable ‘cash flow’, Mr Sounness said evidence suggested that having some livestock was one option for diversifying business risk.
He presented farm benchmarking results which showed that over the long-term, farms that included 20 to 30 per cent livestock were more profitable than their 100 per cent cropped counterparts.
Mr Sounness said the last two seasons had demonstrated that the less diverse the business, the greater its risk profile.
“In an average or better than average season continuous cropping is often more profitable than a mixed farming business, but in poorer season’s the losses are greater,” he said.
Acknowledging that making changes to a farm business structure can be complex, Mr Sounness said digital agriculture was now coming to the fore as a means of collecting and curating farm and financial information to make better decisions based on data.
He said the recently launched Farm4Prophet – an online tool that allows farm managers to test ideas about how their farm will perform if they make changes to the business structure – could help farmers to negotiate some of the challenges around whole-farm business management.
“It allows you to ask the big picture questions and identify how changes to how you operate your farm would affect your risk levels, cashflow and the environment,” he said.
Farm4Prophet was developed by BCG in partnership with CSIRO, ORM, the Ag Excellence Alliance, Planfarm, Farmplan and software developers Square V with funding from the Australian Government.
Utilising CSIRO developed AusFarm (APSIM) modelling for long-term pasture and crop production, Farm4Prophet allows farmers and farming consultants to ask the ‘big picture’ strategic questions about farming.
“It accounts for factors such as nitrogen balance and supplementary feed requirements,” Mr Sounness said.
“Production data is linked to the whole farm financial position to assess financial performance with financial and management constraints modelled, costed and compounded over time.”
Additionally, environmental sustainability of each scenario is compared alongside profitability.
Mr Sounness said technologies such as Farm4Prophet, on-farm weather stations, drones and the soon to be rolled out electronic National Livestock Identification System (NLIS), farm business managers would be required to adapt the way they worked.
“The farm office will have to start to be seen as a profit centre rather than a cost centre … and that is a challenge for our industry.”
Mr Sounness’ full presentation can be viewed on YouTube (linked) below or listened to on Soundcloud.
