The importance of knowing your enterprise profit margins when making crop rotation decisions was the main takeaway from a talk by a Farmanco representative at a recent farm update in Mulwala.
The Grains Research and Development Corporation update last Wednesday saw 120 people gather at the Yarrawonga-Mulwala Golf Club Resort to hear from industry experts.
Farmanco’s Eric Nankivell talked about enterprise crop rotations, something that was a key decision point every year.
‘‘Rotations are often part of a longer term rotational plan, but they are adjusted strategically each year depending upon the short term pricing outlook and the corresponding potential impact on profitability,’’ he said.
‘‘The largest drivers of profitability are yield and price, so these are the assumptions to check out first in relation to your business.’’
Mr Nankivell said it was important to take into account both variable and fixed operating costs, when planning your farm business.
‘‘As a starting point for rotations, the expected profitability of enterprises needs to be established at a common pricing point, expected yields and variable costs.
‘‘This extra step (analysing operating costs) is important because, for example, machinery depreciation is considerably different for crop enterprises compared with livestock enterprises.’’
Mr Nankivell said it was easier in the Riverina for mixed croppers as they weren’t as reliant on legumes as much as crop-only farmers.
‘‘The Riverina does not yet have a profitable legume crop for crop-only systems.
‘‘This is the same as 70 per cent of the Australian cropping area.
‘‘Vetch hay is more popular in the northern area of the Riverina, which requires different skills and equipment to grow it.
‘‘Mixed croppers don’t need to stress about legumes as they probably don’t need one in their rotations as they utilise legume pastures.’’