Changes in productivity and profitability of wool‐growing farms that follow recommendations from agricultural and veterinary studies

OBJECTIVE: To estimate the changes in productivity and profitability in a group of wool-growing farms as they adopted major recommendations from agricultural and veterinary studies. FARMS: Four wool-growing farms in south western Victoria were selected from the clients of the Mackinnon Project, a farm consultancy service run from the University of Melbourne. Each farm had closely followed recommended procedures, kept comprehensive financial and physical records and had been clients for at least 5 years. The comparison group was the South Western Victoria Monitor Farm Project (SWVMFP), about 45 farms in the same region as the study farms that were monitored annually by Agriculture Victoria. PROCEDURE: For a 7-year period, the financial and physical performance of both groups of farms was estimated. Stocking rate, wool production, gross farm income, farm operating costs, net farm income and return on assets were compared. RESULTS: Mean gross farm income of the four study farms steadily rose from 86% of the average SWVMFP farm before the adoption of recommendations to an average of 155%. During the same period, net farm income rose from 70% to 207% of the average of the SWVMFP. Return on asset of the four farms rose irregularly from 26% to 145% of the average of the SWVMFP. Farm operating costs on the four farms were higher than for the SWVMFP group, but the ratio of costs remained relatively constant. CONCLUSION: The adoption of proven research results was associated with large increases in net farm income. An increase in gross income, rather than a reduction in costs was the main reason for this. Research results offer a way to increase the financial viability of wool-growing farmers, many of whom are currently unable to maintain their lifestyle, resources and infrastructure.