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Livestock Gross Margins

Thursday, February 13, 2020

The PIRSA 2020 Farm Gross Margin and Enterprise Planning Guide has been released thanks to continued funding from South Australian Grains Industry Trust (SAGIT) and the South Australian Sheep Industry Fund (SIF). The recent run of dry springs has made it critical to assess the potential profitability of alternatives when making enterprise selection decisions. Although this is an individual decision for each farm business, tightening margins in many enterprises is driving the need for a more robust examination of the risks and rewards of the various alternatives.

To assist with the examination of gross margins of alternative enterprises PIRSA have produced both a hard copy and an Excel based version of the Farm Gross Margin Guide. There are cropping and livestock Excel versions, which can be quickly downloaded from either the PIRSA or SAGIT websites. The cropping version has a large range of crop and pasture (annual and perennial) types that can quickly and easily be adjusted to meet your individual farm and business circumstances. Income for the pasture gross margins comes from the livestock gross margins to ensure all enterprise costs are taken into consideration.

Livestock returns will vary depending on the amount and cost of feed required as a result of the continued dry conditions in many parts of the state. Gross margins can quickly be adjusted to determine the profitability of higher levels of supplementary feed. Despite wool prices being highly volatile in 2019, returns from self-replacing merino flocks are likely to remain strong in 2020.

By Michael Wurst, PIRSA Rural Solutions SA