Â鶹´«Ã½AV

YORKTON - Recently I was perusing some online agriculture media sites just to keep up a little more with the issues of the day, and one headline popped out and made me smile; ‘Beef breeding must aim for profitability.’

The reason for the smile was twofold, one it’s hard to imagine anyone who has managed to survive in the often volatile beef sector who hasn’t long ago realized you have to work to try and make at least a few dollars at the end of the year.

And, secondly, in my 30-plus years of writing about agriculture, the idea of reinforcing the idea of profitability is far from new, and is in fact an oft revisited theme.

The reason is actually not so hard to understand. We, and in this I would suggest business in general, not just farming, can easily be followed by big number revenues, equating a hefty cheque with profitability.

It is actually quite understandable given society in general always seemed focused on making more dollars without factoring in the costs associated with achieving a higher cheque at day’s end.

In farming it is also very much a reality tied to the goal of higher production, and equating that with profit. If an acre of land produces 10 more bushels of a crop it seems obvious it is more profitable.

If a calf weans at 50 pounds heavier, profits have to be higher.

Of course neither the additional bushels, or added pounds, are not necessarily profitable production.

There are costs to production – fertilizer, labour, fuel, crop production products in the case of crops – and those need to be factored against the production.

One can easily imagine upping input costs and while getting a positive boost in production, that boost not offsetting the added input investment costs.

However, ‘the system’ of agriculture largely pushes the idea of maximizing production as the measure of success.

It might sound good at the coffee shop to brag about big bushel crops, but the real measure of farm success has to be those bushels generating a net profit.

At present achieving the profits for crops is not as challenging given the high returns possible from strong markets.

The cattle sector is different right now with higher feed costs and much tighter margins to work with, so controlling costs to give the operation a better chance at being profitable is a must.

Of course if a sharper expenses pencil can help profitability in a tighter price market, it should be a useful and much used tool at all times as net income would seem the most important number in a business ledger.