THE SHEEP FARM BUDGET

Press, Volume XCVIII, Issue 28802, 24 January 1959, Page 9

THE SHEEP FARM BUDGET

Need For Planning Essential

The need for planning and budgeting on sheep farms in Canterbury in the light of the present economic situation is emphasised in a bulletin produced by Messrs H. E. Garrett and J. W. B. Guise, of the farm management department of Canterbury Agricultural College, Lincoln, and published by the Canterbury Chamber of Commerce. The bulletin is called “A Budget for a Canterbury Sheep Farm for 1958-59.”

Over the last 10 years the marj gin between costs and revenue I has been, in general, satisfactory, the authors say, and there has been little attention given to budgeting. Because on land suited only to sheep farming diversification of production is not possible, the farmer must attempt to improve efficiency and costs where possible. Planning and budgeting are i essential if the farmer is to have an advance knowledge of his probable financial situation at the end of the season. Even though subsequent events may cause him to depart ftom his original programme to some extent, the planing farmer seldom fails to improve production, the condition of his farm and his net profit, the bulletin says. The farm (init dealt with in the bulletin is a two-man unit of 700 acres on medium-clay downs about six miles from the nearest centre and 36 miles from Christchurch. i Capital Involved Capital involved is made up of land valued at £24 an acre, buildings valued at £4200, totalling £21,000, a total improved value of £3O an acre. Livestock consisting of 1300 breeding ewes at £3 10s, 380 ewe hoggets at £3, 30 wether hoggets at £2 10s, 26 rams at £7 10s, 10 killers at £3 and 10 dog tucker killers at 10s, totalling in all £5995, and 44 head of cattle totalling £835, has a total value, including a handy hack, of £6850. t Implements and plant, which includes a crawler and a wheel tractor, is valued at £3230, giving an all-up total capital outlay of £31,080. These figures are based conservatively on clearing sale values for stock and plant in early winter, 1958, and land and buildings at current market values in September. No cash cropping or small seeds production is included in the budget as it is not typical of the blay country, and the budget is designed to illustrate sheep farming. The cropping included is believed to represent the practices of some of the better farmers. 11 -Year Rotation The property selected contains some 430 acres of wheel tractor country, 150 acres suited to crawler and 120 acres of unploughable gullies and scrub, 10 acres of which is solid gorse and scrub. On an 11-year rotation the ploughable land is handled on the following basis:— Ploughing out of old pasture, 52 acres; to forage crops, 20 acres rape, 12 acres swedes and chou moellier and 20 acres turnips; to new pasture, 20 acres new grass and turnips and 32 acres new grass and rape; to grazing and hay. 438 acres grazing and 30 acres of hay from the old pastures (one to nine years). The 468 acres of old pastures includes the 52 acres to be ploughed. This is done in MayJune after summer and early winter grazing. Lime is applied by local contractors on the fallowed ground before sowing new grass if possible, or as early thereafter as the new pasture will stand the trucks. A further application is made the next year. A hundred tons of lime is applied annually to the improved land. Reverted superphosphate at the rate of two cwt an acre is applied with root and rape crops and with new pasture and one cwt an acre for older pastures annually, except for the two years before ploughing. The unploughable portion of the farm has been developed over the last 10 years with scattered gorse and scrub being burnt and regrowth controlled. One-sixth of the area has been grazed hard each year and oversown aerially with clover seconds together with two cwt of molybdenised superphosphate. The topdressing is repeated after three years with ordinary super, so that a total of 40 acres is treated each year. Stock Policy The 1300 Romney breeding ewes are all put to Romney rams with ! an average lambing percentage of 1105 at tailing and 100 per cent, to 'sale or entry to the flock as replacements. Annual mortality is 15 per cent, and an over-all wool clip of 101 b includes crutchings. Surplus ewe . lambs are sold as I lambs and the wether lambs are I all sold fat, approximately 15 per x cent, off their mothers. The average lamb weight is 341 b with 40 per cent, selling as seconds. Cattle are bought as steer calves and are held over two winters to sell in the good October markets. House cows are Shorthorn and I all calves are reared as replacements or for sale as beef cattle.

The Budget Dividing the estimated income and expenditure into itemised sections, the buUetin sets out the details of the farm budget. A summary of various items is as follows: Income: lambs, £2335; cull ewes, £725; wool, £2216; cattle, £525.' skins, £25, at total of £5826. Expenditure: stock purchases, £384; farm stores, £205; lime and manure, £503; seeds, £218; cartage, £174: contracting, £153; motor expenses, £225; commissions and charges £202; accountancy and legal, £25; telephone and mail, £18; electricity, £25; repairs and maintenance, £454; interest on seasonal overdraft, £45; general and unforeseen, £5B; wages. £1710; rates and land tax, £140; insurances, £29; depreciation, £379; interest. £1650; a total of £6552. As can be seen there is a deficit of £726 in the estimated income, compared with the expected outgoings. Provided that present levels for sheep products are maintained, efficiently managed holdings are not likely to end the season with such a deficit. Apart from the £935 allowed for management, which having the £726 deficit subtracted leaves a net total of £209, farmers will receive a proportion of interest payments shown where their own capita] is involved. However, many farmers who have purchased their properties in the last few years and who have heavy commitments may experience real hardship in meeting these at present prjee levels. The recent drop ‘of 40 per cent, in the price of wool and the expected fall of 15 per cent, in the price of lamb have changed sheepfanning from a relatively profitable enterprise to a state of affairs where only the most efficient can pay full interest on the whole enterprise at current valuations and maintain to the full the farming asset of land, buildings, stock and plant. “This state of affairs puts a most decided accent on efficiency, and budgeting is at present our most useful tool to achieve high levels of efficiency' in management,’’ the bulletin says