Planning sheep businesses to succeed, not just survive

I've been told to stand on here so the people online can see me, so I'll try not to wander off too much. Thanks. It's great to be back. It's not often I get two goes at this, and I don't know if that's a good thing or not. It's the post-lunch session, which is a bit tough, so we'll try and keep it fast.

What you can't see there is the running of the bulls in Spain. Sometimes I think farming can be a bit like that. We're dressed up nice and hoping we're not going to get hit by a horn.

Setting yourself up not to fail

Again, I'm not on my usual topic of genetics. I'm trying to mix it up a bit. In farming, how can we set ourselves up not to fail, and how can we set ourselves up to succeed, rather than just aiming to get through? Rather than hoping it's going to rain, hoping the season improves, hoping the price goes up, hoping we don't get FMD, hoping whatever. Like Tim spoke about before, how do we set ourselves up with a plan?

What we want to be doing is acting at the top of the cliff. Once we're down the bottom of the cliff, in that firefighting mode, we're stuffed. There are only limited options once you're off the cliff. What we need to do is set ourselves up with plans, so plan for success.

I've talked about this before: if you measure it, it moves. That's a quote from a Kiwi. Once we start recording stuff and getting a plan on things, it naturally just goes right. I don't know if anyone else has had this experience, but when I first found out my wife was pregnant, all of a sudden all I could see was baby seats and prams. That stuff had been in my life the entire time, but our brain is really good at filtering out stuff you don't need to know about. If you haven't got a pregnant wife, you're not worried about baby stuff. You're worried about where the next beer is coming from. But as soon as you have, your whole mindset changes.

It's the same thing with having a plan and a future focus. All of a sudden all you can see is the thing, and it naturally starts to move in the direction you want, almost by luck. But it isn't luck. Right now our brains are filtering out the fact that it's windy out there, or the bloke next to me has had too much lunch, or whatever. Our brain is taking in all this stuff, but hopefully you're just focused on exactly what I'm saying.

So having a plan is a really key part of being successful. I've got a brother who's farming. He's a breeder, he's very much like me except he's got red hair, which again is how genetics works. He's a stock agent as well, and every now and again he used to ring me up and say, "I've got a client who's got sheep dying in the paddock. It must be a nutrient deficiency of some description."

I'd go, "Oh yeah, what are they running on? Are they running on a stubble?" "Oh yeah." "Where are they in lactation?" "Oh, they're lambing." "Have they got any feed in the paddock?" "Oh yeah, not a lot." I'm like, "That's not a restriction of a nutrient. That's a restriction of energy, of grass. That's vitamin G they need." Often we hear these things and we're looking for a silver bullet, but the reality is that with a good plan, preventative nutrition and preventative animal health, we can get around that.

Often we have to act two or three months before we think we need to. Before we see that problem, we need to have acted, because we know how sheep behave. Once they're down low in condition score, or they've stopped growing or they're losing weight, it's a big job to bring them back up into that positive zone. If you don't let them lose weight in the first place, they're really easy to maintain.

Obviously we talked about this a bit this morning, and you'll continue to hear that theme: if you've got the right genetics, you're in a good spot. But not all of us are blessed with having made good decisions on our genetics for the last couple of decades. We're dealing with different sheep, and you can manage your way through that. It's really critical in poor seasons. It's easy to farm when all is good, but obviously that doesn't happen all the time. Most of the time it's either too wet, too cold or too dry. Very rarely is it actually optimum, so managing those poor seasons is critical.

Traits of a good manager

I have the absolute privilege of working with lots of businesses across Australia and New Zealand, and spending a lot of time in great businesses. We live in a bubble at neXtgen Agri, because we work with really good businesses, and it's awesome. I've tried to sum up the traits of a good manager that we see.

They insist on a plan and organise the work to fit that plan. They check they have everything they need to do the job, so they're not the ones who get to lamb marking and go, "Oh, we haven't got any rings," or "I haven't got any tags." This one's a bit of self-promotion, but they engage outside service providers. That's not just their genetics advice. It'll be their agronomist and a range of people around them. They get that team around them to help them make those decisions, rather than having to have it all within the business.

They have really clear communication channels. That's something we see in successful businesses: there aren't surprises. Humans don't like surprises, unless they're good ones, and more often than not they're not so good ones. This one's pretty key: they accept responsibility and improve. No one likes to work in a team where someone's playing the blame game, and the team is what it's all about. And flexibility is pretty key in a farming system. So they're just the traits we see in a good manager.

I'll talk about the three plans I think you need to have in every business. Tim talked about a fourth plan, which is your animal health plan or your biosecurity plan. When Amber gets up here, they'll probably talk about an environmental plan, so there might end up being five plans you need to think about by the end of the day. But I'll start with my three anyway.

The dry season plan

The first is the dry season plan. The good times never last forever, and the later the rain comes, the more stress there is. If you're down south, you're waiting for the autumn break every year. Up here it can be dry at different times, but generally we know it's coming. I don't think anyone believes we're going to farm in a perfect season for the next couple of decades. That's not going to happen. We know dry times are coming.

I was talking to someone who's building a drought lot right now, because he doesn't want to do it when it's dry, when it's too hard to make decisions. That is exactly how you should act. Build for the dry when it's wet, because it's going to happen. We need to get organised and get our plans sorted at the times when we can actually make a good decision. When you're in the heat of a drought, all you're doing is looking up at the sky, or looking at the Bureau, and hoping those little clouds might turn up.

It's very hard to make a good decision when you're under stress. Humans aren't that great under stress. A few people are, and they tend to be a bit freakish. But I know for myself, when I'm under stress, I just make poor short-term decisions. So making all your decisions about the dry when it's actually not dry is a really cracking way to do it.

I encourage you to think about how you're going to deal with the next dry time, or it might be the next too-wet time, but having those plans in place is really critical. Which ewes are the first ones to go? Which sheep on my farm are going to be the first to go when it stops raining? If it hasn't rained by this date, which mob is the next mob going out? If they've all got EIDs in their ears, we know which ones were wet-dry last year, so they go out first, or whatever. The more information you've got in your business, the better you can make those decisions.

And if you've made those decisions before, it's really easy to press the button. It doesn't matter if you sold those sheep and it started raining as soon as you put them on the truck, which I'm sure has happened to almost everyone in the room. It was still a good decision at the time. It turned out not to be the right outcome, but that doesn't mean it was a bad decision. So you can make good decisions, and make them at the right time.

So make a plan for it. Know which sheep to sell. When it does rain, go really hard. Plant more feed than you normally would and get feed on farm. All the good people I work with who really deal with seasonal variability have a lot of on-farm storage, because once you need feed, there are lots of people around you who also need it.

This one's massive, and it's hard enough to achieve: adjusting stocking rate to carrying capacity as much as you can. You'll never get that perfectly right, because you'd need a rear-vision mirror. But we have John Young, who works with us as a group, and he's an economic modeller. When he does the modelling, if you could match your stocking rate to the season, if you knew what it was going to be, you would never actually lose money in a drought. You'd still be profitable every year because you'd matched it well.

The reality is you can't do that, because you don't know when it's going to rain or not, so you have to guess. But what it tells you is that if you're adjusting stocking rate, if you're selling down sheep, then you've got opportunities. One of the things about having the right genetics is that you can bounce back out of a crap year really quickly, because you can sell down. You can do this much better if you've got reproduction on your side. If you're weaning 130 or 140 per cent, you're one or two years in and bang, you're back up to numbers. If you're doing 80, you're going to be keeping seven, eight, nine and 10-year-old ewes and really struggling to respond.

You can't flex stocking rate unless you've got reproduction, without having to buy and sell, and then that puts the biosecurity plan at risk. So having that plan and having the right sheep is really important.

The genetic plan

This is a really important plan. Obviously this is the only one I'd really like to talk about. No, that's not true. A genetic plan is a really key thing to have, and that's why we talk about a breeding objective. It's basically the five or six traits you really want to focus on. What do I want to improve with my genetics? Obviously you can improve other stuff on your farm, but how is my next generation of sheep, my next set of lambs, going to be better than the ones I've got on the ground now?

If you do that flock profile, you get a baseline. Then you sit down with everyone involved in your business and work out what you want to improve most. You might write down lambing percentage, and then you go, right, what do I actually want to do? Do I want more lambs on the ground, or more lambs surviving, and which trait am I therefore linking to? So you get five traits out. We've got a great template to run you through that process, and if you email me I'll send it out to you.

It leads you through a process, and it forces you into four categories: traits that make you money, traits that save you time, traits that save you money and traits that delight the customer. I force you down that line because it's important to have a balanced breeding objective. That's what the index tool Henry ran through is trying to do. We're trying to make sure we're not letting anyone off with simple breeding objectives like high fleece weight and low micron, because we know it's more difficult than that. We're in the Merino game. If we wanted to do something easy, we'd go and do crossbreds.

I think that's a safe thing to say in this audience.

Once you know that focus and what you want to improve, obviously you need a plan to put it into place, a plan to make that genetic gain. You get the five traits to focus on. It might be early growth, fat, muscle, worm egg count and dag, for example, or wrinkle or whatever. Then you go, right, where do I go and what am I going to do? How am I going to get my ram selection right? How am I going to get my ewe selection right? Which ewes am I culling? Which rams do I buy, and how am I going to go about that?

Which ewes do I select in terms of young ewe selection? And importantly, which ewes go out the back door? Is it just everything that turns six years old on the farm that gets culled? Is it the ones that are wet-dry? Is it the ewe lambs that didn't get pregnant? That will change depending on what your plan is and what your objective is.

Lots of people are sitting there like those blokes, mostly blokes, who are crazy enough to stand in front of bulls in Spain, waiting to see if they get hit or not. We don't want to be like that with our genetics. We don't want to just let chance decide which animals stay on our farms or which animals we bring onto our farms, because we're better than that.

The health and nutrition plan

Moving off genetics reluctantly, the health and nutrition plan. No two years are the same, but the overall plan isn't that different. Once you put the rams in the paddock with the ewes, you've set the time. It's no surprise that they're lambing, because we knew 147 days before lambing that they got pregnant. We're in control of this calendar. We choose when shearing is and we choose when lambing is, so we therefore have an obligation to be ready for it. We have an obligation to our ewes to provide them the energy they require, and to provide the right management.

So, twins lambing at condition score 3.2. I'll acknowledge this is tougher the further west you go. When you get out into Dave's sort of country, where there are 8,000-acre paddocks or whatever, you can't split things up and do all the management, so make this concept fit your farm. I'm not about cookie-cutter management. It's about how you optimise your production system.

What we know from the modelling is that if you get twins lambing at condition score 3.2 and singles at 2.8, and anyone who's done Lifetime Ewe Management will know this, and you hit those targets year in, year out, regardless of the season, you will maximise profitability in that season. That's independent of the year, and that's what John Young's modelling has shown. Before the micron premium kicked in, half the money you spent on grain to feed up those twin-bearing ewes came straight back in the wool cheque, because the fleece weight went up with it.

So we know that if you hit these targets every year, you will optimise your profit in that year. We know that doesn't happen by accident. It happens by planning and by really stringent management. Because what happens if you run those two groups of sheep in the same mob? Exactly the opposite. Your twins will lamb at 2.8 and your singles will lamb at 3.2. You'll lose 15 per cent more lambs in that twin mob than you needed to, and you'll put some of those single-bearing ewes at risk of dystocia and lambing trouble. So you haven't optimised your opportunity. That's having a plan, and again, you set the plan, because you put the rams in the paddock.

Target weight at joining is absolutely key. If you're mating your ewe lambs, it's weight at ewe lamb joining. You know what your target is, and if you don't weigh them, you're just going to get what you get. But we know that if you set those sheep up, they're great sheep for the rest of their lives.

Everyone's had the experience of a group of ewes that are a bit crap because they went through a tough year as weaners and never really got up to weight. They were just a pack of scrubbers the entire time they were on the farm, and you couldn't wait to see the back of them. That all results from not focusing on it. I know it was a tough year, but if we focus on our target weight at joining, even if you're not joining ewe lambs, you have that number set in your targets. It's 54 kilos or whatever your number is, and then you weigh every month to hit that target. You weigh 50 sheep out of that mob. If we want to optimise production systems, we need to optimise our management.

Then there's the rest of this stuff: feed targets for lambing, getting that right and manipulating it with your time of lambing, worm monitoring, drenching, ram health and vaccinations. All of that can be part of the health and nutrition plan. Again, if you don't want to write this thing down yourself, get some help to do it, but I think it's pretty critical.

Looking after your rams

On that slide there's a little dot called ram health. What I see on farms is that we can put all this effort into going out and finding the right rams, and then we take them home and run the Hunger Games. We put them in a paddock we call the ram paddock, because that's convenient, and then we just forget about them. They get out there and they kill each other, they get wormy, they get flystruck. They are our rock stars. We've invested a lot of time and effort into them.

I hear people say, "Well, the tough ones will be the ones we want to keep anyway." Maybe, but maybe not. We can't afford that when we're investing in genetics. You make a lot of effort in choosing who you buy your rams from and which ones you buy, so you therefore have an obligation to actually look after those animals. You're not running the Hunger Games. You look after them, you watch them, you trim the odd foot. You do the things you wouldn't do in your ewe flock, because you're trying to look after that resource. You don't let half of them die, or even 10 per cent of them.

The ideal result is that you can go into that ram team and do a ram team audit. You go through them and read their ear tags off, or ideally run their EIDs off. Then you go into Sheep Genetics and enter all those tag numbers, and this is something we do for clients. You look at their current breeding values, because they'll have changed a bit from when you bought them, and I'm sure Dave does this twice a week or something.

Then you're looking at those numbers, and you can cull the ones that are actually low on data. You're not culling ones because they broke their leg fighting, or got flystruck and died. The more of those animals that are still there, the more you can cull on data, and the fewer have gone because of management that just wasn't up to scratch. So look after your ram team. I think that's a pretty key message and part of the health and nutrition plan.

Investments that make sheep businesses hum

There's not endless money to spend on a farm, obviously. You're going to hear lots of stuff at these sorts of events and you can't implement it all. But I'll list out, as I go around farms, the investments I think make sense in terms of making our sheep businesses hum.

Who owns a set of scales to weigh their sheep? All right, pretty good, mostly. Condition scoring is awesome for older sheep. Once the sheep hits 12 months of age, you don't really need to weigh it ever again, unless it's a stud sheep and you want some of those adult weights. Generally in our commercial sheep we don't have to weigh those animals, because you can condition score, and you don't need any fancy gear to do that.

But for growing young stock it's absolutely key, because we want targets. We want to say they're going to hit 55 kilos at joining, and we've got no hope of doing that unless we've got scales and we're routinely weighing. Same with replacement ewes and sale stock. You don't have to be fancy in this stuff. I'm not saying get the best, the fastest and the shiniest. An old set that does the job is fine, because you're only weighing small numbers, and if you're new to this they don't have to be fancy. But without them you're going to be over and under drenching, and you're going to have no idea of your production system. We're running a business, and you need to get some weights on those animals.

We're not talking about hours in the yards. We're talking about 50 ewes in a mob. A condition score or a weight will tell you the average of the mob, and most of the time that's all you need.

Water systems, I reckon, are key. The number of people I see who get in trouble with water is huge, and it limits the way you can graze your farm. So whenever you can, invest in a water system. Having a plan and then just knocking off bits as you go is a pretty key focus, because often you can't afford to put good water systems everywhere at once. But if you know where everything's going, when you've got a bit of spare money you can order a heap of pipe and have it ready to go in. You just keep building to that plan over time. And remember to GPS the pipes, because there's nothing more annoying than hitting them again. I reckon investing in water is critical for farms that change.

Laneways are awesome. If you're cropping as well as running sheep it's a bit tougher, but laneways are such huge labour savers. There's efficiency of feeding and efficiency of getting animals in and out of the yards. Animals that are off feed are costing you money, so efficient systems that get them to the yards quickly are pretty key. Incorporate tree belts and make those laneways wide. The businesses I see that are really chasing labour efficiency have a lot of laneway systems.

It's awesome to see big shiny things being bought, Dave. We're seeing more investment in sheep yards than ever before at the moment. It makes such a difference. You're expecting your staff, and normally your family, to work in a pretty tough environment, and I've never heard someone say we shouldn't have invested in new sheep yards. They've always just absolutely loved the new experience of stuff that works. We've got an obligation to keep our animals safe and keep our people safe, and substandard facilities are pretty tough to work in. So make sure you're building into your budgets that you're going to replace those sheep yards wherever you can.

I think there's a lot of advantage in getting sheep in and out of yards as quickly as we can. On bigger places especially, taking the work to the sheep has massive potential. A lot of good businesses do this. They don't bring everything to the main set of yards. Half the time, when you bought the place, the yards were at one end, two or three kilometres or more away from where the sheep are. Put in small sets of yards where you can just plug in your gear, your scanner or whatever, and do the work where the sheep are.

I reckon that's a really key part, particularly if you want to get on top of condition scoring and weighing. You belt out there, get some sheep through a quick little set of yards, get 50 weights and you're done. If you don't have that set of yards and you've got to drag them four kilometres to get the weights, you're just going to say, "That Fergus bloke's an idiot, I'm not doing it. There's no chance I can fit that in my day." But if you take the work to the sheep, there's an opportunity there.

Again, part of planning for that dry year is having really good feeding systems. You'd have a good laugh at the Kiwis when they decide to feed grain. They've got the equivalent of a wheelbarrow that they cruise around and feed their sheep with, because they don't have to do it very often. They're pretty well set up for baleage, but they're not well set up for grain. For us, you need good feeders so you can get a lot of grain out to the sheep quickly, because feeding is a labour killer. If you're spending all your time feeding sheep, you're not investing in the next bits.

Obviously we're in a newly renovated shearing shed, but sheds are going to have to get updated. I get to work on some really good places, and we also get to go to some pretty ordinary setups that are looking to change. Make sure we're setting ourselves up with a kitchen, a toilet and hot water. Getting shearers to come in is getting harder and harder, and I obviously don't need to tell you that, but we need to make sure we've got good facilities for people to work in.

Summing up

I'm going to sum up there. Measure stuff. Benchmark yourselves, your genetics and your sheep. Plan for all the stuff that's going to happen.

Question why you're doing stuff. Think about it: if I had none of the infrastructure on this place, none of the people were here, and I just got planted on this place from the moon, what would I do? How would I manage this place if there were no preconceived ideas about how I should manage it? Question everything around you. Sometimes the answer is that it's right, but it's still been a good question. And if you don't ask those questions, someone younger than you is going to challenge you at some point anyway, so you may as well get into it and do it yourself.

And celebrate success. That's enough for me. Thanks, team.