The price of efficiency

bob charles

We are constantly told we have to get more efficient in all parts of our business. new ideas are put forward with the promised result of reducing our costs, increasing our outputs etc. If one was change methods and machines that would improve efficiency so that would be constantly updated. new ideas and thinking usually lead to reduced profits as the change is implemented, it takes awhile to get the best out of a new system. The price of efficiency is often greater than the actually efficiency saving if the true cost of everything is accounted for. Have the farms that were constantly at the cutting edge dont seem to survive whereas inefficient jack down the road seems to survive during thick and thin.

Personally, one facet of my business isnt efficient. To improve things I would have to spend about 15k that would have a lifespan of 15years . I would save about 2 hrs a week and ontop of this about save about €25 a week. So call it €50 all in @ 40 weeks of the year. is it worth the change?

severeoversteer

asked for the teagasc beef manual for the Christmas thinking it would be full of good tips

I am very close to calling it useless and outdated

the home farm surpassed it years ago

teagasc and ifj have no idea of costs either

in my opinion ensure there is no waste in the system you have, and ask your self is there a cheaper alternative to achieve something

Muckit

Great idea for a tread. I often thing the same.

The best type of efficiency is that that can be achieved at minimal or zero cost. An accumulation of small changes or work methods that on their own mean little, but combined can make a money saving or reduce hours worked.

delaval

severeoversteer wrote: »

asked for the teagasc beef manual for the Christmas thinking it would be full of good tips

I am very close to calling it useless and outdated

the home farm surpassed it years ago

teagasc and ifj have no idea of costs either

in my opinion ensure there is no waste in the system you have, and ask your self is there a cheaper alternative to achieve something

Spot on.

Hear it all the time about milking.
Bigger parlour 250k with the trimmings. Save an hour or so???

Farmer Pudsey

I often question so called efficiency with machinery. Cost is horrendous. Also lads that look at cost of slurry/baling and go off and buy a tanker/baler and then find they have to upgrade their tractor and then 2-3 years find out about extra wear and tear and the extra diesel bill from a six cylinder 140HP tractor ticking over as opposed to a 70-80hp tractor ticking.

You can add 4WD's, 14X8 boxes, diet feeders and bell and whistles. I am sure that we could find a few more if I taught about it.


15K to spend to save 2K/year a lot would depend on you tax situation and will there be added maintenance costs, After that if it was a case of giving 1K to tax man for 8 years or buying this equipment and writing down over 8 years then I might do it. However it would depend on if I had other option and if they would achiever a better return. I see like all farmers you are overvaluing your time at 12.5/hour:rolleyes::rolleyes:

bob charles

Farmer Pudsey wrote: »

I see like all farmers you are overvaluing your time at 12.5/hour:rolleyes::rolleyes:

I didnt want to appear cocky and value my time at €15 an hour.

Gillespy

delaval wrote: »

Hear it all the time about milking.
Bigger parlour 250k with the trimmings. Save an hour or so???

Aren't you overmilking your underfed cows otherwise though? And do you want your kids to grow up without knowing their father?

Been there. I was so wide eyed in my youth to following and trying to implement as much as I could into my own place. Now I roll my eyes at almost everything. Stick to the tried and trusted.

rs8

teagasc are a waste of time

MfMan

How far do you go with efficiency though as opposed to saving yourself labour and hassle? E.g. would you persevere with a perfectly good 8x5 cattle trailer and take 4/5 runs to move cattle or invest in a 14x6 trailer and do the job in 2 runs? If possible, I would invest in good equipment, though it might be a bit dearer, if I would get the value and life out of it in the longer term.

coolshannagh28

I,m with Pudsey here the margins in farming particularly beef but also milk over the medium term are so small that its v difficult to justify much mechanisation ,inefficient Jack, Bob refers to and whom we all know is the oul fella that buys cheap sells dear manages with a 35 and a spike and lives frugally but buys the farm next to him when it comes up. He ties most of his capital up in the resource that generates the most income ,stock then land and on a sliding scale after that ,2 grand would buy his machinery but he is seriously efficient at making money.

onyerbikepat

I think effeciency is the hallmark of prosperity.:cool:
It's not just for farmers but for countries and society in general. Look at the poorer underdeveloped countries. People are caught in poverity traps and can't afford to buy the machines or make investments that would make them more productive.
Look at what you have done so far and ask yourself, what do you regret buying or investing in, in the past.

Neddyusa

coolshannagh28 wrote: »

I,m with Pudsey here the margins in farming particularly beef but also milk over the medium term are so small that its v difficult to justify much mechanisation ,inefficient Jack, Bob refers to and whom we all know is the oul fella that buys cheap sells dear manages with a 35 and a spike and lives frugally but buys the farm next to him when it comes up. He ties most of his capital up in the resource that generates the most income ,stock then land and on a sliding scale after that ,2 grand would buy his machinery but he is seriously efficient at making money.

Think there is a lot of truth with this especially with respect to beef farms...
Investments in machinery, mainly (and other overhead or fixed costs) can be a big drain on efficiency and profitability on beef farms, as the study below found:

http://www.ingentaconnect.com/content/iagrm/ijam/2013/00000002/00000004/art00005

"Greater income efficiency was associated with lower levels of concentrate feeding and lower overhead costs per livestock unit (LU). Fragmentation, paid labour and capital investment were significantly negatively associated with income efficiency. There was a positive relationship between market gross output per LU and income efficiency. Negative market net margins tended to be subsidised by greater off-farm income on smaller (more scale efficient) farms and by greater direct payments on larger (more scale inefficient) farms. Consequently, prospects for increasing beef output via scale expansion are negative in an external environment of declining subsidies and reduced off-farm employment in rural areas."

severeoversteer

the efficiencies I have made in the past year are:

new crush and handling yard which I think is the best money spent as it means no matter how cract the animal is, even a child would be safe, cost a few bob though

bought a tanco bale shear, yes it costs a few grand but its some machine to save time and im getting a week out of a pair of jeans before im ran out of the house. but I couldn't say it pays for itself. I had the tractor and loader to handle it, other wise I wouldn't have bought it.

handling facilities on the outfarms, save carting cattle back to the yard

weighing scales, was annoyed at the price before I bought it, but I quickly forgot about the cost after the first week, as it facilitated farm to farm buying of cattle by the kilo and it identified the best diet for cattle in the shed and helped keep them on target


debating on whether slatmats are worth their money at the moment, straw is too dear around here for bedding, could anyone advise me based on experience?
24 month bullocks will be finished on nthem and 16 month bulls

Mac Taylor

Farmer Pudsey wrote: »

I often question so called efficiency with machinery. Cost is horrendous. Also lads that look at cost of slurry/baling and go off and buy a tanker/baler and then find they have to upgrade their tractor and then 2-3 years find out about extra wear and tear and the extra diesel bill from a six cylinder 140HP tractor ticking over as opposed to a 70-80hp tractor ticking.
You can add 4WD's, 14X8 boxes, diet feeders and bell and whistles. I am sure that we could find a few more if I taught about it.


15K to spend to save 2K/year a lot would depend on you tax situation and will there be added maintenance costs, After that if it was a case of giving 1K to tax man for 8 years or buying this equipment and writing down over 8 years then I might do it. However it would depend on if I had other option and if they would achiever a better return. I see like all farmers you are overvaluing your time at 12.5/hour:rolleyes::rolleyes:

Would have to agree with Pudsey. Payback of 8 years from a commercial perspecive does not make alot of sense. Also you should factor in what else you could do with the money. Looking at my own situation here we will have to spend money to continue part time farming because of one factor I cannot increase: time. From a pure commercial sense We should not spend it, but I want to continue farming, we will also look at utilising contactors more because from a time and money perspective I cannot justify spending on new machinery etc.

49801

bob charles wrote: »

Personally, one facet of my business isnt efficient. To improve things I would have to spend about 15k that would have a lifespan of 15years . I would save about 2 hrs a week and ontop of this about save about €25 a week. So call it €50 all in @ 40 weeks of the year. is it worth the change?

So pay back is 7-8yrs assuming no financing cost. That's not too bad of a ROI.
Question really is how you would spend the time saved? More free time is perfectly acceptable answer. Or is there an opportunity to use that free time to make more money at something else more profitable. Also if current setup is overburden and making mistakes as a result of not making improvement might cost you.


Have you ever used discounted cash flow principals to evaluate a project?

kevthegaff

Im putting in a shed next year for xtra cubicles and it will cover the collecting yard also, yes its gona cost alot but i wont have to worry about inspections for run off or outwintering! Also i should get to 120+ cows in a one man operation, everything under roof. Sometimes the money invested gives one an easier life, i do think it will make things more efficient

TUBBY

Where does reseeding and drainage fit in though. Surely both are necessary but costly.

The aul boy ye refer to down the road would not bother with either....

hurling_lad

I think that it's a bit of a myth that Teagasc/IFJ/whoever are somehow breathing down fellas necks getting them to make changes to their set-ups in the name of efficiency or increased productivity.

Every farmer is different in terms of where they were, where they are and where they want to get to so all that organisations like Teagasc can do is compile general advice based on evidence that is gathered together through solid, science-based methods. While they are obviously, driven on by the government, currently very keen to increase overall production for this "Harvest 2020" lark, it is still up to every individual to take or leave any advice they give.

The bottom line is that we farmers are our own bosses and have to weigh up any changes or investments that we make in the name of efficiency, profitability or whatever for ourselves and in the context of our own unique circumstances. No-one is forcing us to do anything.

keep going

bob charles wrote: »

We are constantly told we have to get more efficient in all parts of our business. new ideas are put forward with the promised result of reducing our costs, increasing our outputs etc. If one was change methods and machines that would improve efficiency so that would be constantly updated. new ideas and thinking usually lead to reduced profits as the change is implemented, it takes awhile to get the best out of a new system. The price of efficiency is often greater than the actually efficiency saving if the true cost of everything is accounted for. Have the farms that were constantly at the cutting edge dont seem to survive whereas inefficient jack down the road seems to survive during thick and thin.

Personally, one facet of my business isnt efficient. To improve things I would have to spend about 15k that would have a lifespan of 15years . I would save about 2 hrs a week and ontop of this about save about €25 a week. So call it €50 all in @ 40 weeks of the year. is it worth the
The thing about it is there is abalance between money and scale.it would be cheaper and quite efficent to feed 2 cows with a wheelbarrow and a 4 prong pike than a loader and grab but it would not be efficent and cheaper to feed 200 cows with the pike.using extreme examples but the point is if numbers creep up you have to be more labour efficient and spend money to do so.that said not enough people spend time looking at their system rather than spending money .

Farmer Pudsey

MfMan wrote: »

How far do you go with efficiency though as opposed to saving yourself labour and hassle? E.g. would you persevere with a perfectly good 8x5 cattle trailer and take 4/5 runs to move cattle or invest in a 14x6 trailer and do the job in 2 runs? If possible, I would invest in good equipment, though it might be a bit dearer, if I would get the value and life out of it in the longer term.

I have an 8X5 trailer, now any time I need to move an good few cattle I pay someone. No point in having a piece of equipment that you uses only half dozen times a year. If you buy in a mart fellas will nearly climb all over you to be paid to take them home. I love going into farm's where I see 12or14X6 boxes or a tractor trailer free transport yippee goes through my mind. I prefer to invest in buildings or land improvments.

severeoversteer wrote: »

the efficiencies I have made in the past year are:

new crush and handling yard which I think is the best money spent as it means no matter how cract the animal is, even a child would be safe, cost a few bob though

bought a tanco bale shear, yes it costs a few grand but its some machine to save time and im getting a week out of a pair of jeans before im ran out of the house. but I couldn't say it pays for itself. I had the tractor and loader to handle it, other wise I wouldn't have bought it.

handling facilities on the outfarms, save carting cattle back to the yard

weighing scales, was annoyed at the price before I bought it, but I quickly forgot about the cost after the first week, as it facilitated farm to farm buying of cattle by the kilo and it identified the best diet for cattle in the shed and helped keep them on target


debating on whether slatmats are worth their money at the moment, straw is too dear around here for bedding, could anyone advise me based on experience?
24 month bullocks will be finished on nthem and 16 month bulls

I totally agree with investing in crushes or loading faculity's not sure about the grab.

Why do you need mats or straw to finish cattle what is wrong with slats. I have mats I got them under a grant a few years ago do not know if I would pay full price. I would not finish any cattle on straw it is too expensive.

bob charles

regarding mats, think I priced them @ €65 sq meter, thats 25% the cost of building a sq meter of slatted shed. So for ever 4 sq meter of mat, I could add another 1sq meter of shed. i of the opinion that more accomodation is a better investment than mats. I have none, probably should have a pen for lame cattle, but I remove all lame animals on first site to straw

Farmer Pudsey

bob charles wrote: »

regarding mats, think I priced them @ €65 sq meter, thats 25% the cost of building a sq meter of slatted shed. So for ever 4 sq meter of mat, I could add another 1sq meter of shed. i of the opinion that more accomodation is a better investment than mats. I have none, probably should have a pen for lame cattle, but I remove all lame animals on first site to straw

I think it cast about 2400 for 4 pens. Total area about 96sq metres so about 25/sq metre after grant and vat. If I had not got the grant I do not think I would have done it. However having said that I think they are a good product. I have cattle on ordinary slats and the cattle on the mats are cleaner and dryer. I have the easy fix comfort mats.

severeoversteer

bob charles wrote: »

regarding mats, think I priced them @ €65 sq meter, thats 25% the cost of building a sq meter of slatted shed. So for ever 4 sq meter of mat, I could add another 1sq meter of shed. i of the opinion that more accomodation is a better investment than mats. I have none, probably should have a pen for lame cattle, but I remove all lame animals on first site to straw

im plagued with lameness for the last month, i am probably going to make an outdoor pad beside the shed, give them some exercise, might put mats in one or two pens though

they are crazy dear those mats, id have them in the morning if they were half the price

Farmer Pudsey

severeoversteer wrote: »

im plagued with lameness for the last month, i am probably going to make an outdoor pad beside the shed, give them some exercise, might put mats in one or two pens though

they are crazy dear those mats, id have them in the morning if they were half the price

What is the cause of the lameness is it laminitis based or is it an issue with slats. What kind of diet are they on is it a high ration diet.

simx

Have a bout of lameless the last 10 days or so with cows bulling on slats

Nekarsulm

depending on your starting point, the biggest gains in efficientcy can be achieved with out huge outlay. Organising the way gates are hung and meet each other, yard layout, fencing layout and good lighting and handing set ups can make a frustrating job a pleasure. Getting a couple of ahour of a runaround from animals because they escaped from a yard or knocked down a gate is seriously discouraging.

feartuath

Efficiency is doing things right
Effectiveness is doing the right thing

We can all end up doing the wrong thing very efficiently and end up costing us money

just do it

Whether the price of efficiency is worth it can be ascertained by doing a cost benefit analysis . You may have to hire a consultant to do it for you and their fee will be double the saving so you'll lose either way

Nekarsulm

but you have just contributed to the consultants efficency, does that count?

mf240

A ring feeder never broke anyone.

bob charles

mf240 wrote: »

A ring feeder never broke anyone.

it will break anyone that put fr bullocks around it this winter

darragh_haven

bob charles wrote: »

it will break anyone that put fr bullocks around it this winter

Is that the voice of experience bob. Or is it the voice of someone in the middle of the experience