Benchmarking grows profits

McBride highlights benchmarking benefits


Beef
STRATEGIC MOVE: Nick McBride, Conmurra Station, Conmurra, is urging all farmers to join in benchmarking to compare their performance with others and find ways to increase profitability.

STRATEGIC MOVE: Nick McBride, Conmurra Station, Conmurra, is urging all farmers to join in benchmarking to compare their performance with others and find ways to increase profitability.

Aa

South East woolgrower and beef producer Nick McBride is urging all livestock producers to benchmark their businesses. He delivered the Mac Troup Oration at last month's Grasslands Society of Southern Australia conference.

Aa

Figures don’t lie and there is nowhere to hide.

That was one of the key messages from South East fine woolgrower and beef producer Nick McBride, who urged livestock producers to benchmark their businesses. 

The newly-elected Member for MacKillop delivered the Mac Troup Oration at last month’s Grasslands Society of Southern Australia annual conference at Millicent.

He said benchmarking had greatly improved the bottom line of his 3500-hectare Conmurra property in the past 20 years, but also put the family company, AJ&PA McBride Pty Ltd, of which he is a director,  in a strong position.

“It not only shows a farm’s position compared with others, it highlights what other farms are doing better,” he said.

“Farms that benchmark are farms that care about their performance and want their properties to make more than just wages.”

The wake-up call for him was a Department of Agriculture evaluation that Conmurra Station was a poor financial performer, making only wages for a profit in 1996.

“The Department of Ag teacher was telling us as a teacher employed by PIRSA he was earning $60,000 a year and said if you can’t pay your own family $60,000, what are you doing?” he said.

It was the catalyst for Mr McBride and his wife Katherine to make some major on-farm changes which have seen them join the top 20 per cent of producers, according to ABARES farm profit figures.

The lift in profitability has largely come from switching from a strong wool flock to fine wool Merinos averaging about 17.5 micron.

In the early 2000s they also moved their autumn lambing and calving to spring to lift Conmurra’s carrying capacity to between 45,000 dry sheep equivalent and 50,000DSE.

“Conmurra is known to be a hard block with two-thirds of it going under water every year except two that I can remember,” he said.

The introduction of 100 embryos with twin-bearing genes from Nebraska University via Canada in 2004 has also boosted herd fertility.

“We are getting about 70 twins a year from our 500 cows but we have decided not to pursue (these genetics) further as it needs an owner-operator,” he said.

Mr McBride says AJ&PA McBride, which is turning 100 next year, has also benefited greatly from benchmarking its four South East properties – Ashmore, Brooklyn, Konetta and Nepowie – in the past decade.

More recently, the four northern pastoral properties have joined benchmarking. 

“We don’t see other operations in the industry as competitors – everyone can benefit and lift profitability through benchmarking,” he said.

Woolgrowers make decisions on figures

Benchmarking has helped large family-owned company AJ&PA McBride make sound financial decisions, according to company director Nick McBride.

This includes the sale of Aroona Station, Esperance, WA, in 2009 and the company’s historic former Adelaide office in Franklin Street in 2007.

“Aroona was a big asset for us, making up about 30 percent of our equity, but it was not performing that well for a number of reasons – it was isolated from the other properties and we were reliant on a sharefarmer for the large cropping area,” he said. 

As well as returning money to shareholders, Mr McBride says the sale of these assets enabled them to buy three commercial properties in Adelaide that have given consistent annual returns.

“We had been promised 6 per cent to 8pc and they are delivering on that, however there has been minimal capital growth compared to rural property,” he said.

At the time of the collapse of the Reserve Price Scheme, wool made up 65pc of the company’s revenue but in ensuing years it has diversified into viticulture and horticulture.

This includes a 33-hectare vineyard in the Wrattonbully wine region, a 20pc stake in a 100ha citrus block in the Riverland, plus interest in Bleasdale winery at Langhorne Creek.

Mr McBride says benchmarking has also helped the company put strategies in place on its properties to take advantage of the high livestock commodity prices.

“If you are interested in getting a return from your land you need to measure and compare,” he said.

Aa

From the front page

Sponsored by