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Is legacy management a roadblock on your farm?

Chris Howie, Stockco, September 7, 2022

Chris Howie.

LEGACY management is a roadblock in Australian agricultural business — whether on the smallest family farm or the largest corporate operation — by continually blocking implementation of new ideas for fear of damaging the existing business.

Ask yourself why successful new businesses grow so quickly? It’s because they don’t have to worry about what is going to happen to their existing business. They look at opportunity and what system, approach or idea will give the best return. In Australia we are extremely poor at the adoption of new ideas as a whole and very quick to knock those that have a go “outside the box”.

Like the proverbial bucket of crabs – every time a crab goes to crawl out and see what’s new the rest drag it back in.

Don’t get me wrong, this is not about wholesale change to what you do. We have seen some monumental failures of changing “everything” and disregarding learnings from the past – Goyders Line in the south comes to mind. However, a progressive, structured, and managed implementation of new ideas using the right specialists is gold and many of these changes are very low cost. Feed mapping to assess kilos of weight gain potential, worm testing to reduce drenching, electrolytes and hay to cattle before trucking, in paddock weighing, spraying out capeweed in pasture, managing people differently etc etc etc.

Often it is the management team that hold the operational staff back from this next generational adoption because they have not taken the time to understand the opportunity or are too busy protecting the status quo. The processing industry is a fantastic example of adoption with staff harder and harder to secure, technology is providing the answers and increased efficiency.

If you are ever going to have a crack at changing something this is the year following such good seasons in many areas. Once the next dry time appears we will all lock down again. Don’t change your entire program but use a paddock, a mob, a new bit of tech or a different way of rewarding staff that can be measured. Hand on heart I can tell you those that are prepared to manage their “legacy” business separately to their adoption and ideas model are lifting the bar way quicker than most boardroom and kitchen table management discussions.

Spring is here and so are the opportunities. We have feed and livestock numbers available to use the feed for the first time since the drought. Livestock finance products remove the overdraft handbrake before harvest is in. Lamb and mutton prices have had a reset and are very buyable as numbers increase quickly from September until November on the back of exceptional lambing percentages.

Cattle have bounced on the ECYI by 200 cents since the FMD panic but big numbers off grass will start to appear from October. Don’t be the one at the footy club saying “we could have done this, we could have done that” – be the one drinking a cold bevo and smiling.

Food for thought. – Quality always sells. As the sheep, lamb and cattle numbers increase delivery specifications, grids and penalties start to tighten up. In turn we start to see secondary or poorly bred animals start to take larger discounts in the saleyard, at the feedlot or with the final destination processor. Sometimes the “cheap ones” are not so cheap. Think about what you can do with them and then price them on their merits not on the highest price pen on the day.

Pricing will even out for lambs

At this time of the year we quite often see a two-week cycle on lamb pricing. Big yarding’s and the price drops. Next week numbers fall because of last week’s price and the market rises. In this type of cycle it can sometimes be very difficult to get on the right leg once you have started your sale program. Numbers will increase from now on and I suggest the pricing will even out.

Merino wether lamb numbers for sale are on the rise and I stand by my comments last month that there is a real opportunity for those prepared to do the work. I also noted a considerable number of these being offered on A+ instead of going to the sale yards. Not bad business – merino and first cross wether lambs are a base level commodity in the sheep game. Unlike ewes which are driven by breed, wool and bloodline. Wethers (and steers) can be a 1 trick pony with price driven by who ever is prepared to take the smallest margin because of the teeth discount at 14 months.

Early Bendigo update from Ron Rutledge, Nutrien Victoria. Best trade suckers making $215 or $8 to mid $8’s per kg. The lead pens of the 1 st x store lambs making $130 – $140 but as numbers run we may see 2 nd x making less in a few weeks. All of the enquiry has been north with very few headings south. Good numbers of SA lambs being sighted in the larger NSW and Victorian centres also.

The merino ewes sales have started with the first for spring at Karoonda SA. Daniel Doecke, Spence Dix & Co let me know they yarded 7000 merino ewes with prices on 1.5 year olds topping at $320 for some 70kg types. The 55kg ewes were making $220 – $280 and the lighter ewes $180 – $200.

Older ewes ranged between $150 – $170. Daniel said “Overall support from other agencies was very good with ewes heading to the SA mallee, South East and the Victorina Mallee and Wimmera” Knowing the quality of sheep in this area I think the buyer and seller should be very happy with those values.

Mutton values have drifted under $5 in most states with a considerable wait for a delivery window.

Again kill space determines demand and with rising lamb numbers mutton tends to become the poor cousin at this time of year. We can’t even blame COVID or the Ukraine for this – its been happening as long as I can remember – Cleopatra may have mentioned it also at some stage but I would need to ask some of the older agents if that is true…

 Cattle job back on track

Justin Keen, Corcoran and Parker Wangaratta let me know that the cattle job was back on track with buyers at the recent Wangaratta sale taking the market on 280 – 300 kg calves to $7.00 plus.

Justin said “the approach from the buyers gallery was just solid orders without the fizz we saw earlier in the year. Buyers have done their sums and decided to step back into the market before the spring rush”

Sam Bartlett, Adcock Partners Quilpie had a similar result with a big run of South Western Queensland calves on Auctions Plus making up to $7.60. Sam commented “the buying enquiry is strong with a lot of focus on well bred larger lines”.  I spoke to Jaime Howie, Livestock support Elders Albury between drinks after co-captaining the winning Lavington Panthers Womens AFL premiership side. 734kg Angus cows at Barnawartha topped at $4.30 to the processors – that is a whopping $3156 per head. Get on the quad and start mustering cows I say..

Stud bull sales – it seems the last 2 years we have seen stud sales go from strength to strength. With Texas Angus averaging over $28,000 in August most cattlemen would have thought that would have been hard to shake in the context of things. Andrew Bickford, Elders Bathurst dropped a line about the Millah Murrah result on Thursday with an eye watering average of $43,632 up from the 2021 average of $34,221. I know one buyer who went with a $25,000 budget and paid $38,000. In his words “the investment in the bulls is rewarding me on the sale price of my calves at the other end. Managing my feed and understanding my weight gain in the paddock is allowing me to convert good genetics into kilos produced with repeat buyers” Irrespective of the stud this is a fantastic mindset for a commercial operation – Cattle or sheep.

The rebound in 4 – 5 weeks of the Eastern Young Cattle Indicator has shown a solid recovery from the FMD fear cycle. This does not mean the risk is gone just that rational thought has re-emerged. The StockCo average invoice values reflect the period when the market was most impacted.

This is a good example of how the EYCI can be used to map trend.

As noted last month, the FMD fear factor is reflected in the August StockCo invoices showing some significant movement with processor needs filled for August and a large part of September.

Industry event – it’s not often in the livestock industry we see an event that is run to say thank you – normally they are put on to get a message across or ask for something.

Wodonga TAFE organised a dinner last week for the agencies, service providers, industry specialists and clients who support the  Certificate 4 in Agriculture Agency and supply chain “Training for the Future”. TAFE had two workshop groups in.

Sydney chef, Mark Best helped design the menu, sponsored by Margra Lamb and Ex SAS member Harry Moffitt as the key note speaker. 110 guests including 22 young agents and service providers enjoyed a 3-course, wine matched meal delivered by the TAFE hospitality cohort at The Cube in central Wodonga.

Having supported this training course for 11 years with 300 participants and 30 agencies involved Graham Hart, Executive Director – Education & Training, Wodonga TAFE said “it felt like the right thing to do for our supporters after the COVID disruption and the success of the evening endorsed that”. The beef was supplied by JBS Great Southern, Aussie White lamb from Magra and sponsorship support from Michael Crowley – MLA, Angus Street – Auctions Plus, Doug Snell – StockCo, Marc Greening – Injemira Beef Genetics, Dom Shanahan – Shanahan Transport, Graham Gilmour – Tattykeel and Michael O’Brien – RMA (Rural Marketing Agents).

Harry Moffitt spoke of building personal resilience interspaced with stories from his military service in Timor, Iraq and Afghanistan. In his opening remarks he said (paraphrased) “I rarely take notes at speaking engagements but the previous speakers and the reason behind the event have moved me to reflect on the reason you are all here tonight”.

At the end of the evening Harry donated copies of his book 11 Bats with Angus Street – A+, providing a listing package. 2 books and the A+ package were offered in an impromptu auction by Geoff Rice AWN Langlands Hanlon, Parkes and recently retired Elders Goulburn veteran and long time supporter Steve Ridley. Proceeds are going to Spinal Cord Injuries Australia and spirited bidding saw the 1 st book go to Cameron Hilton, Corcoran and Parker for $1000, A+ $500 listing package for $1050to AWN Langlands Hanlon Parkes and the final book for $2000 to Graham Gilmour – Tattykeel.

The auction happen off the back of the Tattykeel Resilience ram donation to the SCIA charity being a perfect match for Harrys keynote presentation and will be offered at the on property auction on the 28 th of September at Oberon.

Footnote: Alec Clydesdale, McCulloch Agency, Tamworth organised the training group to run an auction the following night for the right to shave off AWN’s Clint Hooper’s half arsed moustache and raised another $320 for the cause.

Opportunities

Merino lambs – big numbers and plenty of upside

Replacement ewes – buy early

Treat for flies – they will appear with the first sun

Start an adoption / try project within your existing business

Vaccinate for pulpy kidney – big clover year

Cash your old cows in quick. The money is fantastic

What’s your plan for your weaners in the summer? Start thinking.

Country football and netball finals – get on board

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Comments

  1. Charlie de Fegely, September 7, 2022

    Great article Chris. We are facing a labour shortage and have failed to innovate new technologies to replace current work practices. For example shearing and fruit picking, to name a couple. Another is to reward producers on a value-based system. It’s not only with farmers that legacy management is a roadblock.

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