What is the ‘20% that makes the 80% difference’ to optimise profitability of livestock production? As farmers, what are the key levers we can use to make the biggest impact on profit? It is important to know how to determine your success in livestock production. Profit is generated by optimizing income while keeping expenses under control. The levers of income in livestock production are threefold:

Lever 1

Stocking rate/ha = The total live weight of the herd (on average throughout the year) divided by the total hectares of the land. 

Production/ha = mass of the livestock herd at the end of the year – mass of the livestock herd at the beginning of the year – kilogram live weight bought for the year + kilogram live weight sold for the year

Lever 2

Production %= kilogram live weight/ha produced as a percentage of stocking rate/ha. 
Production efficiency is mostly affected by fertility of the herd (% calves and lambs weaned as % of cows and ewes mated); the herd composition; and the kilogram growth of the animals per annum. Benchmark fi gures diff er with diff erent production systems (i.e. weaner production, ±32%; cow-ox production, ±37%; and grow- ing out weaners to oxen, ±45%), and the production effi  ciency of sheep is higher than cattle.

Income/ha = Stocking rate/ha (1) X production efficiency (2) X Price/kg (3)
The art of optimising livestock income is finding a balance between maximising a sustainable stocking rate per hectare while ensuring production efficiency is kept at optimum levels (constantly adapting according to the available resources on the farm).

Kilogram live weight produced per hectare: To calculate the annual yield on the farm, only three figurese required once a year.
i.    What is the mass of the livestock herd at the end of the production year? (normally at the end of the financial year)
ii.  What is the total kilogram live weight that was sold from the farm in the year?
iii. What is the total kilogram live weight that was bought or arrived on the farm?

Lever 3

Price/kg
​As producers are price takers in the market, they have little influence on the market price. However, deciding on when to market in the year and what types of products are marketed can have an infl uence on maximising the price realised per kilogram live weight.To keep expenses under control, most of the case studies indicate that the female herd should be early maturing with early fat deposi- tion, and adapted to the management system, rangeland condition and forage quality on the farm. An adapted herd requires minimum additional input and less additional lick for the maintenance of body condition. Selection for the genetic ability to gain fat early and the ability to quickly recover body condition after weaning should be prioritised. The Body Condition Score is medium heritable (±30%) and genetic progress can be achieved.