Hicks Beef’ production soars with benchmarking

Benchmarking has helped bring exceptional growth to the Hicks family beef operation at Holbrook, NSW, in just eight years. See how they did it.

Tom Hicks pictured on his Holbrook property in NSW. Picture: Yuri Kouzmin

When Tom Hicks set out to benchmark the family beef business eight years ago, he never anticipated the exceptional growth that was to come from it.

Through data analysis, performance indicators, considered comparisons and strategic goal setting, the Hicks family has been able to increase production 10-fold, soaring from selling 50 to 500 stud bulls a year with continued expansion.

Profit has naturally risen as a result, helping free up cash flow and alleviating longer term farm succession pressures.

“As a business you have to weigh up performance otherwise it’s just a hobby,” Tom Hicks said.

“Benchmarking really helped us know where we were up to and where the low hanging fruit was and what we could change in what order.”

COST VERSUS PRODUCTION

When Tom, and wife Kate, moved back to the family farm and seedstock business in 2009 after his time at college and working away, he noticed his parents, Andrew and Anne, had benchmarked in the past and gained significant financial understanding from it.

“I understood the cattle and how to run the place physically but I didn’t feel I was doing a good job of knowing cost versus production,” Tom said.

“I didn’t understand the flow of money coming in and out of the business and how and where that ended up. I was thinking about it but didn’t know how to take that next step.”

Tom joined a benchmarking group on the southwest slopes near Coolac, NSW, that met three times a year.

Benchmarking analyses the productivity of the whole farm business and individual enterprises within the farm.

The results and their financial consequences are compared to the results of other farms ranked average and top 20 per cent.

“It is daunting when they are looking at your business,” Tom said.

“It can feel intimidating at the start but if you don’t challenge yourself in that way, you won’t get very far.”

PERFORMANCE AND PROFIT

Tom said benchmarking had helped weigh up their business performance and profitability, identify areas of improvement and provide strategies on what to change, when and how.

“Our cost of production was too high because our production was too low,” Tom said.

“We didn’t need to go in and cut more costs, we needed to get the production side of it going.”

With the data in front of them, moving forward was easier. The Hicks’ increased their stocking rate and focused on selling more bulls.

They set achievable targets – aiming for 100 bulls, then 500 and now 600.

“I didn’t feel we were doing anything too risky at the time,” Tom said.

“I had a lot of belief that the cattle were being undersold and we needed to get them out there.”

GROWTH AND EXPANSION

The Hicks’ host two annual bull sales selling 60 to 70 bulls in autumn and 90 to 100 bulls in spring with the remainder sold via contract or private sales. Buyers are spread from Gippsland through to Far North Queensland.

They run 2000 cows in a black composite and Red Angus seedstock program with composites making up 70 per cent of the herd.

There are 1000 head managed on the 2000ha home farm at Holbrook and 1000 cows are run as part of their tropical program on 1200ha at Jingellic, NSW.

The tropical program – composites crossed with adaptable Bos Taurus and Bos Indicus bulls – was implemented 10 years ago to access northern markets as part of the Hicks’ risk management strategy.

It has been a key avenue for business growth, having expanded from 20 to 30 bulls up to 250-plus each year.

“We’ve become involved in a partnership to supply some of the family operations in the Gulf with composite bulls,” Tom said.

As opposed to the straight Brahman base, composites have a straight back and provide an option for sale into southern markets rather than being locked into live export.

“The composites are tough enough to survive up there with the added fertility and carcass traits,” Tom said.

“It’s a very different environment in Queensland but we’ve developed good relationships and understanding of our client’s systems and how they work to help service their requirements.”

VALUES OF DATA

The Hicks Beef composite is designed for heavy commercial stocking rates and is a maternally focused breed.

Tom said their females must calve unassisted, wean a calf annually, join within two cycles, remain structurally sound and manage above average commercial stocking rates.

“This composite enables producers to exploit hybrid vigour – enhancing fertility, steer weight, calf numbers, and carcass quality – while ensuring a consistent breed type,” he said.

The Hicks’ have won the Teys Australia commercial feedlot trial three times along with multiple feedlot and carcass awards.

“We were one of the most successful exhibitors at the time and that validated what we were doing for producers in the south,” Tom said.

“It is a different type of benchmarking that everyone can be involved in - that if this is what you do, this is what you get.”

The Hicks’ target clients who look at data and value benchmarking because they are the ones that are growing and taking on scale.

“It means we don’t have bull sales that make tops of $100,000, that doesn’t appeal to me,” Tom said.

“We want to be a seedstock operation that is actually focusing on profitability for our clients per hectare.

“Improving performance on a per hectare basis rather than having the biggest and shiniest product in the world.

“It has paid off because we can relate to those people – that’s who we are – we aren’t trying to be something we are not.”

GENETIC GAIN WINDFALL

The Hicks family has been breeding cattle for more than 70 years and they now have four full time staff across two properties.

The herd is spring calving to match their feed budget – cattle are mostly run on native pastures – with calves yard weaned in August at five to six months to ensure the little bulls are kept away from females.

Ninety to 100 per cent of the herd is AI’d and an ET program is undertaken, varying from 200 to 600 cows depending on seasonal conditions and if there are shortfalls.

The Hicks’ have been genotyping for more than seven years.

“It’s made our genetic gain so much easier,” Tom said.

“You used to use a bull or female and you’d need to get progeny out of them before you get accuracy but now you have accuracy as soon as you submit the data.

“It takes that risk out of it. You don’t have to wait as long.”

Once birth weights and genotype data is available, they are able to identify elite genetics and make decisions early, often as calves.

Weaners that don’t make the grade are backgrounded for Greenhams or finished on grass at 14 months, 450kg liveweight.

Bulls are sold as 500kg-plus yearlings or two year olds, depending on client requirements.

ECONOMIC DRIVERS

Their key economic benchmarking tool is profit per dry sheep equivalent and they aim to run 1.8 to 2 DSE/ha per 100mm of rainfall.

Through soil testing and accurate fertiliser application, as well as rotational grazing, the Hicks’ grow as much grass as possible to avoid supplementary feed, which they buy-in as needed.

The property has been transformed since the family bought it in 1986 - from three paddocks to 40, shelter belts and riparian zones. A wetland zone has also been created at the Jingellic property.

The bulk of their capital improvements have been made, which has helped with efficiency and cost reduction.

“Now that we aren’t in development, we are in a discipline stage around spending and thinking of every dollar we spend as an investment,” Tom said.

Their key to creating a more viable operation was data, planning, scale and discipline.

“You don’t know what you don’t measure,” he said.

“See where things are up to economically, then once you have that information, have the discipline to act on it.”