Profitability: it’s a numbers game
EverGraze is testing farming systems in different environments across southern Australia
At a glance
- Taking advantage of summer rainfall can deliver benefits.
- Proof sites in Victoria have demonstrated substantial increases in profitability.
Victorian farmers can now benefit from five years worth of results into new farming systems.
The EverGraze program aims to increase profits of sheep and cattle enterprises by up to 50 per cent, while improving water management, use of perennials, biodiversity and soil health.
As well as the 400ha farm in south-west Victoria, other EverGraze ‘proof’ sites are located across the high rainfall zones of southern Australia.
Here we look at the finalised results for the south west Victorian site in more detail.
Overview
The site has an annual average rainfall of 720mm, most of which falls between April and December. Summer storms provide opportunities for summer pasture growth and August-calving Angus cows make up 60 per cent of grazing pressure, with calves born in August/September being kept for sale at 18 months.
Most lambs are sold in December with 20–30 per cent held over and sold in April–May.
The farm currently runs about 20 dry sheep equivalent per hectare (DSE/ha), close to the top 20 per cent of producers benchmarked in the region, according to Livestock Farm Monitor (this project is a DPI initiative and analyses the performance of 109 livestock farming operations across Victoria).
Pastures are mainly Victorian perennial ryegrass and their fertiliser history is about 18kg/ha phosphorus (P) applied annually.
Some paddocks have recently been sown to late-season ryegrass and tall fescue and lucerne has been considered.
The farm is relatively flat but soils and topography vary with drier, sandy soils on hilltops prone to erosion and lower-lying wet flats prone to waterlogging.
Identified issues
Soil fertility: Soils have high phosphorus (P) and sulphur (S) but potassium was limiting growth and clover content.
Supplementary feeding costs: These are high ($163) compared to the district average ($101) due to a shortage of quality pasture in late summer and autumn when weaner cattle are being carried through.
Profit margins: The sheep enterprise is more profitable ($560/ha gross margin) than the cattle ($272/ha gross margin).
What are the options?
An eight-person team of producers, agronomists, economists and animal scientists had a close look at the current soils, pastures, management and livestock.
In consultation with the owners, they suggested alternative pastures, animal and management options.
These alternatives were modelled using the GrassGro computer program to estimate the impact on production, profits and the variability or risk associated with each.
Other considerations taken into account include stress levels, family involvement and lifestyle.
Soil nutrients and stocking rates
Modelling suggested the greatest increase in productivity and profitability occurred when nutrient deficiencies were corrected.
This increased pasture production by about 3000kg/ha, allowing higher stocking rates to be maintained across the farm (up to 32 per cent increase from to 25–28 DSE/ ha depending on the contribution of sheep or cattle).
The gross margin per hectare increased for both systems by around 50 per cent from $272 to $453/ha for the cattle and $560 to $872/ha for the sheep.
Adding lucerne
The modelling showed increasing soil fertility and sowing 25 per cent of the farm to lucerne did not increase the stocking rate any further for either system.
But it did generate an additional $70/ha gross margin for the cattle due to the reduced supplementary feed costs over summer.
Using 25 per cent lucerne had no effect on the mean gross margin/ha of the prime lamb system because there is a limited need for high-quality summer pasture because most lambs are sold in December.
The main benefit of lucerne in both systems was to reduce the exposure to risk associated with dry years.
The addition of lucerne on 25 per cent of the farm also resulted in reduced recharge by 16mm/year (15 per cent) and run-off by 0.2mm/year.
Return on investment
If the farm continued to run 60 per cent cattle DSE and 40 per cent sheep, an additional $8900 return per year could be generated by improving soil fertility, increasing stocking rates and sowing 25 per cent lucerne.
This is compared to just improving soil fertility and increasing stocking rate.
Contact Anita Morant on (03) 5573 0732 or anita.morant@dpi.vic.gov.au
Further Information - read more about Evergraze
