New research has identified that Key Performance Indicators (KPIs) have the greatest influence on the profitability of beef and sheep enterprises.
Researchers have identified that the simple yet highly effective set of metrics could be used to help improve the financial performance of livestock farms.
Regular data collection and benchmarking can help farmers improve their business performance, with the new study saying that KPIs can help with this.
To date, however, it has been unclear which KPIs specifically impact the financial performance of beef and sheep enterprises.
The study, by Aberystwyth University, extracted data on livestock performance from the Farm Business Survey, which provides information on the financial, physical, and environmental performance of farms.
Looking at around 500 suckler beef and sheep farms in England and Wales, researchers examined indicators that measure costs, mortality, productivity and forage area per livestock unit.
Results found that there were several KPIs significantly associated with gross margin per head in all enterprise types, particularly for measures of livestock productivity.
A positive association was seen where increases in calves per cow per year and lambs per breeding stock increased gross margin per head.
Concentrate feed per head had a negative association in all enterprise types, meaning as inputs increased, gross margin per head decreased.
Aberystwyth University's study is the first to demonstrate the influence of livestock production KPIs on the financial performance of beef and sheep farms in England and Wales.
Nia Lloyd, lecturer in Agri-Business at at the university, noted that suckler beef and sheep farms continued to face many external challenges.
However, changes in business management, particularly livestock management, could provide the opportunity for farmers to improve their efficiency and profitability.
“Our study has demonstrated significant associations between gross margin and specific KPIs at a system level," Ms Lloyd added.
"This simple yet highly effective set of metrics could provide livestock farmers with the information they need to make informed changes to the management of their business and to improve its financial performance and resilience.”
