Individual assignment No.1.

(Compulsory For Students of MSc in Agriculture)

Bush Estate – Gross Margins

  • Read carefully the data and information on the activities of Bush Estate given in Section A.
  • Fill in the computation tables of gross margins in Section B).
  • Fill in the missing data in the Appraisal table in Section C), and give a written (half page) evaluation of the performance of Bush Estate compared to the high or average standards given in the table. Add your proposals, suggestions about possible changes.

A) The following data were collected from Bush Estate.

(i)Sales off Farm

₤ / ₤ / ₤
Milk / 98000 / Lambs / 13500 / Wheat / 18700
Cull cows (22) / 7128 / Wool / 650 / Straw - Barley / 1680
Calves (14) / 868 / Cull ewes / 1280 / Straw - Wheat / 750
Dairy heifers (11) / 6600 / Potatoes / 22760
Beef cattle (39) / 20670 / Barley / 15100
Plus: ₤450 worth of milk to house and workers
₤600 ewe premium

(ii)Interdepartmental Transfers

₤
Calves from dairy herd to dairy young stock (37) / 2220
Calves from dairy herd to beef unit (42) / 2940
Dairy heifers from dairy young stock to dairy herd (25) / 15000
Milk from dairy cows to dairy young stock / 450
Milk from dairy cows to beef / 500
Barley produced from / Last year’s harvest
₤ ( t ) / This year’s harvest
₤ ( t )
To dairy cows / - - / 5800 (56 t)
To dairy young stock / 518 (5 t) / 1036 (10 t)
To beef / 518 (5 t) / 1346 (13 t)
To sheep / - / 466 (4,5 t)
Straw: to dairy young stock / - / 480 (24 t)

(iii)Purchase of stock: Gimmer sheep (42) ₤2772; Annual Share Tups bought: ₤400.

(iv)Variable Costs – usage (adjusted for stocks on hand)

Fertilisers (₤) / Seeds (₤) / Sprays (₤) / Sundries (₤) / Casual labour (₤)
Forage / 15600 / 1236 / 855 / 1330 / -
Potatoes / 1440 / 2250 / 390 / 1900 / 4500
Wheat / 2950 / 1400 / 1500 / 150 / -
Barley / 4320 / 3180 / 1680 / 240 / -
24310 / 8066 / 4425 / 3620 / 4500
Purchased feed ₤ / Vet. and medicines ₤ / Miscellaneous ₤
Dairy cows / 24000 / 1600 / 3200
Dairy young stock / 3506 / 500 / 820
Beef / 3816 / 360 / 880
Sheep / 1600 / 650 / 480
32922 / 3110 / 5380

(v)Valuations

Opening valuation, ₤ / Closing valuation, ₤
32000 / Dairy cows / 32000
24900 / Dairy young stock / 24000
21700 / Beef / 21900
10780 / Sheep / 10780
18700 / Wheat / 19400
2884 / Barley / 2100
1800 / Silage and hay / 1600
100 / Straw / 100

(vi)The cropping of Bush Estate is:

Hectares
Grass / 100
Main crop potatoes / 10
Winter wheat / 30
Spring barley / 60
Total: / 200

(vii) Livestock unit calculations:

Average stock / Livestock units / Total
Dairy cows / 100 / ×1 / 100
Dairy young stock
0-1 year / 36 / × 0.34 / 12.24
1-2 year / 35 / × 0.65 / 22.75
2 + year / 17 / × 0.80 / 13.60 / 48.59
18-20 month beef
0-1 year / 40 / × 0.34 / 13.60
1-2 year / 26 / × 0.65 / 16.90 / 30.50
Ewes / 200 / × 0.11 / 22.00
Lambs / 300 / × 0.04 / 12.00
Rams / 6 / × 0.08 / 0.48 / 34.48
213.57

(viii) Bush Estate stocking density = 213.57 /100 = 2.14 LU per forage hectare

The area of forage that each type of stock uses:

Hectares
Dairy cows / 100 ÷ 2.14 = 46.72
Dairy young stock / 48.59 ÷ 2.14 = 22.70
Beef / 30.50 ÷ 2.14 = 14.25
Sheep / 34.48 ÷ 2.14 = 16.11
Total / 99.78

Allocation of total forage costs:Forage costs per LU = ₤ 19221÷213.57 = ₤ 90

Allocations: / ₤
Dairy cows / 100 × 90 = ₤ 9000
Dairy young stock / 48.59 × 90 = ₤ 4373
Beef / 30.50 × 90 = ₤ 2745
Sheep / 34.48 × 90 =₤ 3103
Total / ₤ 19221

Name (with BLOCK LETTERS): …………….…………………..

B) GROSS MARGIN COMPUTATIONS

Gross Margins from dairy herd (100 cows on average)______

Output / ₤ / ₤ / ₤
Milk: sold off farm______/ 98000
To farmhouse / 450
To calves / 950 / 99400
Calves: sold (14) / 868
To dairy young stock (37) / 2220
To beef (42) / 2940 / 6028
Cull cows (22) / 7128 / 112556
Less: Heifers transferred in (25) / 15000
OUTPUT: / 97556
Variable costs:
Purchased concentrates / 24000
Home grown barley / 5800 / 29800
Vet and medicines / 1600
Miscellaneous and AI / 3200 / 34600
Gross margin before forage costs / 62956
Forage costs for cows / 9000
Gross margin after forage / 53956
Gross margin per cow (÷ 100) / 540
Forage area allocated earlier to cows / 46.72 ha
Gross margin per forage hectare from cows / 53956 ÷ 46.72 / ₤ 1155

Gross Margins from dairy young stock ______

Enterprise Output / ₤ / ₤ / ₤
Less:
OUTPUT:
Variable costs:
Gross margin before forage costs
Forage costs
Gross margin after forage
Forage area allocated to dairy young stock
Gross margin per forage hectare

Gross Margins from Beef ______

Enterprise Output / ₤ / ₤ / ₤
Less:
OUTPUT:
Variable costs:
Gross margin before forage costs
Gross margin after forage
Forage area allocated to beef
Gross margin per forage hectare

Gross Margins from Sheep (average carry 200 ewes) ______

Output / ₤ / ₤ / ₤
Less:
OUTPUT:
Variable costs:
Gross margin before forage costs
Forage costs allocated
Gross margin after forage
Gross margin per ewe
Forage area allocated
Gross margin per forage hectare

Gross Margin for Wheat (30 ha)

The ₤ 18700 under sales for wheat refers to grain from the previous year. This year’s crop is all in store and is shown in the Closing Valuation at ₤19400. The cost of seed and part of the fertiliser for this harvest year has been extracted from the previous financial year: ₤1590 for seed and ₤790 for fertiliser. Of the ₤2950 shown as fertiliser expenditure for the current year for wheat ₤2210 was for this year’s crop and ₤740 for the establishment of next year’s. All the sprays and sundries were used on this year’s crop.

₤ / ₤
Output
Variable costs:
Gross margin
Gross margin per hectare

Gross Margin for Barley (60 ha)

The records show that of the 15100 recorded for barley sales 1848 was for the previous year’s crop and 13252 for this year’s.. Include only that quantity of barley fed to stock which was produced during the current year. The variable costs are all for this year’s crop.

₤ / ₤ / ₤
Output
Straw:
Variable costs:
Gross margin
Gross margin per hectare

Gross Margin for Potatoes (10 ha)

₤ / ₤
Output
Variable costs:
Gross margin
Gross margin per hectare

C) Appraisal

Bush Estate / High standard / Average standard
Gross margin per hectare (₤)
Dairy cows / 1250 / 800
Dairy young stock / 400 / 220
Beef / 600 / 480
Sheep / 540 / 350
Potatoes / 1300 / 900
Wheat / 530 / 445
Barley / 540 / 297
Farm average / 635 / 495
Gross margin per head (₤)
Dairy cows / 580 / 440
Ewes / 39 / 29

Evaluation, proposals, suggestions:

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