The level to which data is collected and kept separate determines the level to which producers can analyse their performance.  If all data is kept at a whole farm level, with no ability to differentiate between sheep versus cattle for example, it can be difficult to analyse the performance of the sheep operation, independent of the cattle operation.  

It is important to consider the segments or enterprises of your operation, and whether analysis of performance at that level is relevant to your goals and objectives.  

The ability to analyse the performance of different segments or enterprises, facilitates: 

  • Analysis of the relative performance of different enterprises and their contribution to overall business profitability e.g., how the sheep operation is contributing compared to the cattle operation  
  • Identification and monitoring of trends in the relative performance of different enterprises over time e.g., feed requirements and cost of meeting those  requirements for one enterprise over another in drought years 
  • Management decisions. Use of data on the relative performance of different enterprise to make management decisions for example, choosing to take on agistment stock instead of purchasing trade stock or vice versa   
  • More accurate budgeting. The ability to validate budget assumptions at the enterprise level as opposed to the whole farm level allows producers to account for enterprise mix, for example, budgeted income and expenses are likely to be different for a breeding enterprise compared to that of a trading enterprise. Having historical data at this level would allow producers to account for a shift from a 50% breeding, 50% trading split to a 70% breeding, 30% trading split for example in their budgeted income and expenses. 

It should be noted that it can often be difficult to segregate exact expenses for each enterprise, particularly where two enterprises interact, for instance grazing stock on grain stubbles. However, an attempt to capture the enterprise specific direct costs should be considered. Accurate production data records are an important tool that assist in differentiating or allocating expenses between enterprises, for example use of animal treatment records to differentiate between sheep and cattle animal health expenses.