Completing a Profit Monitor - Don’t leave it too late
Beef specialist Alan Dillon suggests that the first few days after Christmas is an ideal time to get your Profit Monitor figures together for your Teagasc advisor. Having this compiled and compared by mid to late January can be invaluable in holding or reducing costs in 2022.
For farmers who regularly complete Teagasc Profit Monitors and use the data, the information provided is invaluable to deciding the future direction of your business.
While farm accounts are all well and good, in most scenarios the data such as sales and costs can be grouped together therefore giving no real idea of efficiency levels on the farm and also no benchmark data to compare. The data generally comes 10-12 months later than it is needed.
Get the information you need early
The information is required in January each year so as to allow farmers to plan spending for the year ahead and also to highlight areas where costs can be cut. With fertilizer in particular about to double or even treble in price in early 2022, cost conscious farmers are prudently examining previous year’s profit monitor data to see where savings can be made and also to plan cashflow to pay for these inflated fertilizer prices. A similar situation may develop in the case of meal costs, contractor charges and diesel. If beef prices don’t rise significantly in the new year, some hard and fast decisions may need to be made to ensure farmers don’t incur losses on their farm system in 2022.
Beware system drift
Recent rises in beef prices have made the situation more comfortable for beef farmers than in the previous 3 years. It can be very easy for these gains to be swallowed up by over feeding meal, reducing reliance on grass and making poor quality silage. These signs of system drift can occur when commodity prices rise. It can often be seen that net profits on beef farms, particularly in trading or calf to beef systems can be lower in higher beef price years due to farmers losing the run of input costs.
Farmers who complete Profit Monitor regularly are more profitable
A recent study has shown that farmers who complete Profit Monitor regularly are more profitable and have increased the profitability of their farming operations more over the past decade than farmers who either never complete Profit Monitor or who only occasionally completed it.
Find out more about the Profit Monitor here