Comparison In Returns

Press, Volume CV, Issue 31007, 12 March 1966, Page 8

Comparison In Returns

RECENTLY through these I columns Mr R. D. Robinson. of Ashburton, asked | for information on the gross ■ returns on sheep farming

'country in Canterbury farmed , oh 1935 standards and under modern farming methods. i I “Mr Robinson asks for an estimate of the difference in gross returns from sheep; farming country, well developed, carrying three ewes to the acre, and undeveloped, ! carrying three-quarters of a ewe to the acre,’’ comments i, Professor J. D. Stewart pro-! ( fessor of farm management! at Lincoln College. “At current prices, assum- i ing a lambing percentage of, ■. i 110, and wool weights of 101 b.;■ I the gross return a ewe is '; 'approximately £4 15s. Thus, the difference in gross returns:, an acre would be £l4 ss! against £4. In fact there are! a number of leading light l , jland farmers, carrying sheepl :

I only, w ho are grossing more 'than f!5 an acre. “To estimate the amount an ■acre available for meeting all overhead costs, including in-

terest or rent, depreciation, rates, insurances, fixed labour, fixed machinery and power expenses etc., we would need j to calculate the margin over : and above the direct costs a i ewe. “These direct costs a ewe 1 include the following: depreciation, 15s: shearing and jcrutehing, 2s: stock health. Is ;6d: ram costs, Is: cartage and miscellaneous, Is 6d: total, ■2ls. The difference between these direct costs and the . gross return—£3 14s—is what :we .commonly now call the 'gross margin. “But. of course, in addition, we have the costs of growing i and providing the feed. As Mr i Robinson points out. under ' modern plainsland techniques. I involving adequate liming and I

topdressing, pest control, lucerne, the costs an acre are likely to be less than those associated with the constant renewal of pastures which are quickly running out.

“One can only agree that anyone farming plains land at a stocking rate of threequarters of a ewe to the acre is unlikely to be doing very well, unless he has no debt at all, and is content to be making no interest on his own i capital. “One situation, however, where high returns to capital ’ and labour may be made, is where very large areas are farmed on an extensive basis with a low input of labour and capital an acre of land. However, even farmers in this category are finding that the upward trend in costs, overheads and variables, is forcing them to turn their attention to the need for | higher stocking rates.”