Profit per hectare: a scale of determination
GroundCover™ Issue: 120 | 18 Jan 2016 | Author: Nicole Baxter
- Matthew Steber is determined to continue expanding his family’s farm business
- Scale helps spread fixed costs over a larger area
- Sowing timelines fundamental to building profit per hectare
A determined focus on profit per hectare is paying off for one family in the journey towards building a resilient farm business
Matthew Steber is determined to focus on expanding his farm by acquiring as many hectares as he can in the pursuit of business resilience.
The 48-year-old – with his wife Allie, his parents Lou and Lyn, four sons Rory, 16, Thomas, 16, Lachlan, 16, and Patrick, 13, and two full-time staff Jason Clarke and Michael Cole – crops 10,800 hectares near Doodlakine, Western Australia, 230 kilometres east of Perth, where the mean annual rainfall is 320 millimetres.
Over the past 15 years, the Stebers have expanded their landholding by a massive 300 per cent, increasing their farm size from a relatively modest 4000ha in 2001 to 12,040ha in 2016.
Matthew says he has always been driven by scale because the overhead (fixed) costs of farming are massive and he wants to build profit on a per hectare basis as quickly as he can.
“We try to spread our fixed costs over as many hectares as is practical to keep them down on a per hectare basis,” he says.
Another motivation for expanding the farm is to create a viable asset for the next generation.
“Who knows how many of my sons will be growers, but if they do I would like to be able to give them the opportunity,” he says. “There have been too many scenarios I know of where a son or daughter wants to be a grower and there is not sufficient scale in the business to give them that option.”
In the pursuit of maximising profit per hectare, Matthew likes to concentrate on what he describes as “the big things”. He sees these as timeliness of sowing, correct rotation for soil type, effective weed control and adequate nutrition.
To enable timely sowing, Matthew makes every effort to control summer weeds and has as much of the machinery maintenance done as soon as possible to ensure sowing can start within a couple of hours of an early rain.
Even if the machine is not 100 per cent ready, he says it is more important to start because GRDC-supported research and his own experiences have shown, time and again, that early sowing equals more profit per hectare.
Another way Matthew tries to maximise profit per hectare is by running one main sowing rig around the clock, with the help of his two staff.
Matthew owns a 24-metre Morris Contour Drill with paired-row double-shoot knifepoint openers and press wheels, set on 30-centimetre row spacings.
He says the benefit of the paired-row openers is that they place two rows of seed 8 to 10cm apart. This allows for separation of seed and fertiliser, assists with water harvesting, leads to better weed competition and minimises the crop yield penalty common to wider conventional row systems.
To minimise overlap and input waste, the airseeder is fitted with 2cm real-time kinematic GPS guidance and variable-rate technology (VRT) that allows fertiliser and seed rates to be changed on the go with the press of a button.
With odd shaped paddocks, Matthew was keen to look at ways to minimise overlap on headlands so he trialled prototype input control technology last year from Morris in Canada.
The technology is fitted to the aircart and allows individual metering rollers to be shut off to stop the flow of seed and fertiliser. Similar to section control used on boomsprays, the technology eliminates overlap, via GPS, with the variable-rate controller.
Matthew estimates the technology saved about $20,000 in inputs costs over the family’s 10,800ha cropping program in 2015 alone.
“What other investment do you spend $50,000 on and achieve a 40 per cent return every year?” he asks. “It’s a good investment.”
Where it is not economical to run the 24m airseeder because paddocks are too small or rocky, he uses a 17m Flexi-Coil drill and airseeder on a part-time basis to fill in the gaps.
Matthew lists appropriate nutrition as another driver of profit per hectare.
Rather than using liquid nitrogen at sowing, Matthew has analysed the return on investment for granular nitrogen versus liquid nitrogen and settled on using urea at sowing.
“Generally, per unit of nitrogen, Flexi-N is 15 to 25 per cent more expensive than urea,” he says. “We are geared up for granular nitrogen and we save $20,000 to $30,000 a year by using urea at sowing.”
However, liquid nitrogen is considered more efficient for post-emergence and later-season application because it can be applied quickly using the Stebers’ two 36m Case self-propelled boomsprays.
During the past decade, Matthew has collaborated with researchers from Curtin University and CSIRO on a GRDC research project investigating when VRT will pay.
“I didn’t become involved to save fertiliser; rather, I wanted to redistribute where we were putting fertiliser to test if we could achieve a better return on where our fertiliser was applied,” he says.
Working with former Curtin University researcher Dr Roger Mandel, Matthew identified seven focus paddocks on his property and divided them into three zones based on the productive capacity of the soil. Broadly, these were defined as poor, average and good soils depending on their ability to respond to extra inputs.
Matthew says his involvement in the research helped him accept that some parts of paddocks will always produce low yields, giving him the knowledge he needed to redistribute fertiliser to more productive parts of paddocks.
By using a combination of data gleaned from many years of yield mapping, biomass imagery and his own knowledge of soil type variation, the research also gave Matthew the confidence to create prescription maps and set up the equipment needed for variable application of inputs.
One lesson learnt from the research was that crops respond to phosphorus even in average seasons, meaning a small amount of phosphorus always needs to be applied at sowing.
With more land acquired in the past decade, Matthew says his next step is to set up variable-rate input zones across the rest of his landholding.
However, he understands the job is a big one – requiring extensive soil testing, analysis of yield and biomass imagery and on-farm input trials – something he would like to outsource, depending on return on investment. Outsourcing these “core scientific tasks” will, he says, allow him to focus on growing the business.
Another way Matthew tries to maximise returns is by investing time in developing his skills professionally as the manager of a multi-million-dollar business.
He treats farming as a business, not a lifestyle, and even though he holds a Bachelor of Business majoring in agriculture, he attends his local agronomy group, the GRDC Crop Updates and the GRDC Farm Business Updates on the lookout for ways to improve the business.
As a member of the GRDC’s Regional Cropping Solutions Network, Matthew was instrumental in helping to bring the GRDC Business Updates to WA.
Personally, he says they have helped him develop better systems for business tax planning and given him a useful framework for improved decision-making. He encourages more growers to take advantage of the wealth of know-how presented through various agronomy and business events.
More information:Matthew Steber,
0427 458 296,
GRDC Project Code CSA00016, CIC00027
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