SOFTWARE - GROSS MARGIN MODEL

The Sheep CRC assessed a number of GM models already available to the sheep industry and found that while some were very sophisticated in certain components, none "had it all". Therefore, the Sheep CRC, in conjunction with Australian Wool Innovation, commissioned the development of a GM model that included the best features of many models.

With developer, Terence Farrell, and a panel of industry consultants, researchers and extension staff who are frequent users of sheep GM models, a new model was developed: the Sheep Industry Gross Margin Model.

This program will assist you to calculate the gross margin of a sheep enterprise, allowing you to model various changes to management, costs and prices.

Copyright and permission to use
This model, previous and future versions, are the copyright of Australian Wool Innovation Ltd, on behalf of Australian Wool Innovation Ltd and the Australian Sheep Industry CRC.

You are free to download and use the Sheep Industry Gross Margin Model.

Disclaimer
You should check your results by other methods before implementing changes based on the results of this program.

The developers and owners of this program accept no responsibility for the results of decisions based on the use of this program.

About this model
This program will assist you to calculate the gross margin of your sheep enterprise, allowing you to model various changes to management, costs and prices.

This program incorporates a basic feed calculator; however, it is only an approximate guide to feed production capacity. Its primary purpose is to restrict the number of animals that can be added to the farm system by incorporating supplementary feed at the cost that you specify. It adds this cost to the gross margin when the feed supply is deficient in any month due to overstocking. Hence as you increase animals you increase supplementary feed costs if you overstock the system.

The feed calculator is based on information from the Grassgro model (CSIRO), which may not cover your area (particularly rangeland areas). You can enter your own data (an estimate of kilograms of dry matter produced per hectare for each month) or your local agronomist or sheep extension officer may have data relevant to your area.

The program does not include overhead costs (costs that do not change with the level of sheep activity); as the program's main purpose is to compare your system under different management scenarios. Overhead costs such as rates, shed repairs, fence and yard maintenance, fertiliser applications, replanting pastures, management labour and depreciation is not included in a gross margin model. If you wish to compare a wool-shedding breed of sheep that does not rely on the use of a shearing shed then you need to use a whole-farm-budget for that purpose.

This program is different to many others in that it enables you to see the number of sheep that you should have on-hand in each month. The death percentage is spread out evenly across the 11 months after shearing.

To complete the program you will require your data for your farm. If you have no data available have a guess at the value. Enter your data in the yellow cells. Cells that are not coloured are used to calculate totals and sub-totals and you do not need to fill these in.

In some places there are two ways to enter data. One is on the Livestock sheet for the lamb price grid and the other is in the Labour sheet for piece rates or full contract rates. There are pop-up notes to remind you of these options.
There are explanatory notes on several items on many of the sheets. These are indicated by the red triangle in the top right corner of the cells. They will pop up when you move your cursor over the cell and shrink when you move the cursor away from the cell.

When you are doing 'what-if' scenarios the gross margin will recalculate for changes to most items; however, you will need to change the Wool sheet for lambs wool by month if you change lambing time in the Livestock sheet.

Limitations
1. You cannot have two mobs in each age group; you have to treat those mobs as if they were one.
2. The feed model does not calculate the amount of feed consumed in individual paddocks. The use of feed is spread across all paddocks and is calculated on the basis of average rainfall for the regions listed. If you have supplementary crops such as oats, Lucerne or millet that produce more feed than described in the feed model you can reflect this through the paddock fertility score by increasing it from 1-1.5 or 2 if it is a very dense crop.

3. This model has been designed for use with a PC, not all functionality may be present with a Macintosh.
If your main interest in this program is maximising feed use then it is suggested that you use programs that have more robust feed production models such as Grazfeed or Grassgro. You may access these programs via agricultural extension officers.

Before starting
This file contains a number of default values that will be lost once they are changed. It is suggested that you make a master copy of this file, then save new versions of the file with your changes. Alternatively, the original file can be again downloaded from this website.

Using the model
This model operates in Microsoft Excel and uses macros and has only been developed in a PC version (not MAC). You will need to ensure your security level in MS Excel is set to allow macros to run.

To gain a complete gross margin, complete each of the sheets. It is suggested that you review each of the sheets before starting so that you are familiar with what information will be are entered via the Gross margin sheet; there is also a place there for other miscellaneous items.

The yellow boxes are where you should make your changes.

Cells with a red triangle have help comments. Move your mouse over that cell and the comment will appear.

Many other programs lock you out of the formulas so that they cannot be changed. While you do not need to alter any of the formulas, this program allows you access to the formulas if you wish to refine the model. It is a good idea to work out the logic of a formula before you alter it. If you change the formulas and the program does not work then you may need to change it back again. If you have not saved a master copy, then it may be simpler to download the program and start again if you have made a number of changes to the formulas.

In the Livestock sheet, there are two options for lamb pricing. For any one month choose one or other option (not both) depending on whether you sold on a per head basis or over-the-hook.