Setting the strategic direction of a beef enterprise needs to be carried out as part of planning the whole farm business.
Enterprise strategy refers to the allocation of resources such as labour, pastures and finance that will support the chosen herd structure and markets.
Herd structure refers to the:
• Stocking rate
• Numbers of each stock class (such as weaner steers, weaner heifers and cows with calves)
• Age and sex
• Breed
• Calving date
• Weaning date
• Target market and time of sale
• Buffers you require to manage risk.
Guidelines to establishing the best enterprise strategy and herd structure
There are five components to establishing the most profitable herd structure and markets:
1. Know how well your feed supply matches the requirements of your herd for maintenance, growth and reproductive performance. You can build a picture of the normal feed supply and demand for your enterprise by regular feed budgeting. Through regular feed budgeting you are able to predict the likely seasonal fluctuations in feed supply and from this better judge the ‘buffers’ (feed reserves) you need to manage that risk. Regardless of how you go about the next steps towards building your enterprise strategy, you will need to know your feed supply and demand.
2. Develop a range of options for changing feed supply, changing feed demand (herd structure), or targeting new markets that you would like to consider further. The basis for these options will best come from consultation with a range of people including private sector consultants, state department staff, other successful producers and family members and staff.
3. Compare the predicted performance of alternative strategies with the current performance of your beef business. There are several methods available for analysing current performance and alternative strategies. Although these use tools and services of varying complexity, they all require:
– Good property, production performance, and financial records;
– A way of quickly narrowing down the options; and
– A full bioeconomic analysis that ensures all aspects of any major change are included.
4. Decide on the preferred herd structure and market options taking into account your goals and financial constraints.
5. Develop a transition plan from the current enterprise structure to the preferred option.
