Keeping a close eye on costs
26 June 2015
Knowing their cost of production (CoP) has allowed Kim and Kerrie Dunnet to drive change in their enterprise, which focuses on turning off milk vealers.
The couple have been monitoring their CoP for the past six years, following their introduction to MLA’s More Beef from Pastures program through the Department of Agriculture Western Australia (DAFWA). Kim and Kerrie Dunnet recently featured in an MLA More Beef from Pastures YouTube video, explaining how they use the MBfP online manual to help make decisions about their business.
Together with Kim’s parents David and Sandra, the Dunnets run about 1,000 head of cattle, including about 700 first-cross Angus-Friesian cows.
“We first looked at what changes had to be made straight away and then the ones we could work on in the future," Kerrie said.
“We gave ourselves a five-year plan to work with and to make as many changes as we were realistically able to.
“Just being able to see in black and white where your money has been spent and knowing how much it really cost to make a roll of hay, or grow out a calf ready for market, or grow your pasture, you can see where you are able to cut costs, make changes and work more efficiently.
“Our goal is to see where we can lower the cost of production by decreasing our inputs without compromising our production.
“We want to able to increase our beef production and also continue making improvements that will benefit the farm in the future.”
The biggest influences on the Dunnet enterprise CoP were:
- fertiliser costs
- plant and equipment purchases
- fuel and vehicle expenses associated with hay production
- labour
- general farm improvements
- herd management costs, such as animal health
“We can’t do anything about the price of fertiliser, but we do make sure we soil test and plant test so we’re able to use our budgeted product more efficiently,” Kim said.
“With good fertiliser history we can manipulate the fertiliser products used according to their price variations each season, and know we still have a good regime.
“Cattle prices are largely out of our control when purchasing, but by identifying stock that will produce beef that suits our chosen markets, we’re greatly assisting our sustainability.
“When it comes to plant and machinery, it’s easy to fall into the trap of wanting a new tractor, ute or hay equipment, but it’s a large component of your CoP, so we always consider carefully before replacement and make sure we shed and maintain what we have.”
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Kim and Kerrie Dunnet
