Understanding farm management economics

In this presentation, Fred Chudleigh (Principal Agricultural Economist, Department of Agriculture and Fisheries) provides an introduction and overview of the basic economic principles applied to decision making on beef and sheep grazing properties.

The presentation explains the methods and terminology used in the farm management economic analyses conducted as part of the Improving profitability and resilience of beef and sheep businesses in Queensland – Preparing for, responding to, and recovering from drought project.

You can watch the full recording (52:28 minutes) or use the playlist below to jump to the start of a particular section within the presentation.

Playlist

1. Understanding farm management economics
2. The project
3. The decision making framework
4. Economic principles
5. Gross margin analysis
6. Livestock trading schedule
7. Gross margin examples
8. Gross margins in summary
9. Profit
10. Extending a profit analysis to an investment analysis using discounted cash flow
11. NPV and IRR
12. Marginal analysis: partial discounted cash flow analysis (assessing the difference between alternative investments for a property)
13. Converting NPV to an annualised return
14. Assessing the risks: peak deficit and payback period
15. Using farm management economics in scenario analysis
16. Project webpage and products
17. Cash flow analysis
18. Conclusions