MFS Newsletter. March, 2010

Transcription

1 Chairman s Report Welcome to MFS We are pleased to once again manage to sustain similar member numbers to last year including the addition of three new members. I would like to say a big thankyou to all members who continued their support for MFS despite the challenging circumstances of the last 12 months. This year is the first year we have received substantial injection of funds into the organisation. The majority of the funding is for the MFS GrassGro Project, with $85,000 coming from FarmReady supplemented by Woolworths/Landcare Australia of $13,000 and the continual support by Southern Rivers CMA for the project officer position. This is an indication that MFS is starting to be seen by Government and Industry bodies as a credible organisation to invest in. We look forward to benefiting, not only from his wealth of technical experience but also the opportunity to strengthen the partnership between MFS and NSW I&I. Welcome aboard Phil! The Board has been busy in developing its R&D Business Plan (Richard Taylor, Richard Simpson, Nancy Spoljaric), Communications Plan (Oli Cay, Dave Mitchell, Lisa Phillips, Nancy Spoljaric) and Financial Systems (Chris Blencowe, Mike Stephens, Nancy Spoljaric). All these activities are helping to consolidate and form strong systems for the governance and future direction of MFS. The recent good rains have been a great start to the year, and lets hope it s only the beginning of a wet decade! David Mitchell This year our events and research programs will be dominated by the GrassGro project including pasture days based on Evergraze trial sites, Monaro Climate Change modelling predictions, a carbon day out two, Monaro Mums enterprise analysis day, and a Cross - bred lamb shearing trial. The GRDC cereal evaluation trial results will be out within the next couple of months with some useful information and cereal selection recommendations to members. Evergraze Pasture Trial Site - Greenlake Unfortunately, Richard Simpson could not accept the position of Invited Board Director because of CSIRO s policy. We thank Richard for all his input and expertise in the area of Research and Development and for the valuable and strong linkage forged with CSIRO. Phil Graham from NSW Industry& Investment (formerly NSW DPI), has accepted the position made vacant by Richard. Phil is a Pasture & Livestock Technical specialist based at Yass. Phil s working career has included time in the cotton, dairy and textile industries with the last 23 years spent with the NSW Department Primary Industries. Since 2005 he has filled the role as Technical Specialist Grazing Systems covering NSW. A current project Phil manages is looking at the impacts of potential changes in our weather on livestock systems. Page 1

2 What s MFS Doing?? In Partnership with NSW Industry & Investment (DPI), MFS will be working with Doug Alcock to help set up Farm Systems in GrassGro based around the 10 representative soil sites across the Monaro which have been analysed. Once these farm systems have been set up and ground truthed to show realistic modelling of the Monaro conditions/pasture/enterprise performance/soil type etc., the model capabilities can then be demonstrated to producers. This will be followed by a training program offered to all MFS members to demonstrate how the model can be used for individual farm scenarios and the sort of questions that can be answered. GRDC Cereal Evaluation trial results (Cooma & Delegate sites) to be circulated to members within next six weeks. The final report will give a full analysis of the performance of the different cereal varieties and will also provide an income analysis based on cash price and quality results as well as recommendations to come out of the trial. Evergraze trial sites A pasture trial will shortly be sown at Greenlake, Bombala which aims to test the following hypothesis What are the optimal, appropriate species mixes for the predominant granite soil type based on persistence and animal production?. The pasture species to be trialed under rotational grazing include some combinations of phalaris, Lucerne, sub-clover and fescues, and some new species such as talish clover and kuratas caucasian clover (not available commercially until 2011). XBred Lamb Shearing Trial Richard Taylor is conducting an on-farm trial to look at any significant differences in weight gain between shorn and unshorn cross-bred lambs. The trial is planned to be duplicated in a feedlot situation. Results will be made available to all members. Boyce in conjunction with MFS, presented a Farm Accountancy/Business skills workshop in Nimmitabel in February to approximately 18 participants. This interactive workshop focused on skills such as managing farm budgets, designing spreadsheets and producing relevant & useful financial reports. If interest is there, MFS plans to organize a second such day possibly on financial planning, business planning or succession planning? Please register your areas of interest with Nancy Spoljaric nancy@msanda.com.au or Upcoming Events *Introductory GrassGro breakfast session at Nimmitabel Friday 7 th May, 7.30am. Learn more about this decision making tool and how it can be used by individual producers for farm planning. Also learn about the future GrassGro training opportunities and how the MFS GrassGro project funds will be used. *Monaro Mums Day - Looking at the role of the Ewe on the Monaro, economic comparisons of the different ewe enterprises, talk by NSW DPI, David Sackett & Hamish Dickson (nutritionist) re key profit drivers in the sheep Industry & finishing lambs date TBA (April/May). * Ewe Management Course session 1, 22 nd March at Greenlake shearing shed. To be run by NSW I&I with links to the MFS Evergraze Trial. Useful links: *A three year study by Industry & Investment NSW (formerly NSW DPI) scientists has revealed the potential for storing carbon in soil to reduce the impact of climate change titled A Farmers Guide to Increasing Soil Organic Carbon under Pastures. To access the full booklet visit Page 2

3 Following are extracts from a paper titled Sheep Enterprises What are the Differences? which was written by Phil Graham, Grazing Systems Specialist, Industry & Investment NSW, Yass and Ashley White, Livestock Officer, Industry & Investment NSW, Cowra and presented internally in Nov Please note It was done for a fertile site at Yass and demonstrates the ability of modelling tools such as GrassGro to compare the performance of various sheep enterprise s. The MFS GrassGro project will enable similar comparative analysis specifically for the Monaro using local soil data and calibrated native and improved pasture parameter information. If you would like a COMPLETE COPY of this paper (12 pages), please contact Nancy Spoljaric, or nancy@msanda.com.au. Summary Difficult seasonal conditions, over the last 6 years, have placed most farms under significant financial pressure. Producers have been looking for enterprise changes which will quickly improve their profits. New breeds have increased the options available but often new breeds are lacking in local production data. The information in the media has added to the mix to create confusion about the true differences between sheep enterprises. Modeling allows this complex question to be looked at in a logical fashion and combines production and financial factors in the comparison. GrassGro was used at 2 locations in southern N.S.W., Yass and Cowra for the time period 1960 to The results indicated that there was no stand out enterprise based on profit per ha (see table 4). More detailed work within enterprises showed that the range within an enterprise due to changes in genetics or replacement costs were far greater than the differences between enterprises. The risks associated with changing an enterprise are greater than from improving an existing one. It is important that advisers base their comments about enterprise choice on robust information rather than the simplistic information that circulates within the sheep industry. No one sheep enterprise is greatly superior to any others over the long term. Profitability is more influenced by managerial ability, than the enterprise itself Materials and Methods The CSIRO developed GrassGro program can be used to evaluate the impact and assess the risk of different sheep enterprises over the long term. It uses soil, daily weather, plant and animal production data plus financial data to model a grazing system. The program calculates production and financial information for each year. The details provided are the averages for the period and include the variability in results between years. Results Part A) Enterprise Comparison There is little difference in the profitability or productivity ranking of enterprises between Yass and Cowra in Table 4 & Table 5. Part B) Management strategies to improve profit and manage risk. The following work examined a number of the enterprises and how varying some key enterprise variables affect the financial outcomes. Some questions that have been analysed by GrassGro in this paper include; What is the impact of fast or slow finishing phase for lamb? What is the impact of Improved Wool Genetics? What is the impact of varying replacement ewe cost? Which is more important, Meat or Wool in a Dual purpose breeds? What is the impact of dry seasons and reducing stocking rate? Discussion One of the major contributing factors when considering a different enterprise is a change in commodity prices, particularly the relativity between wool and meat for a sheep enterprise. The variability in profit is greater in Page 3

4 enterprises most reliant on lamb sales and less volatile between years in enterprises where wool sales make a significant contribution to profit. The cost of buying in replacements ewes is a significant factor in enterprise choice. A management dilemma for enterprises with options for finishing lambs for slaughter is whether to supplement for fast growth or slow growth when pasture conditions are inadequate to provide growth sufficient to turn off lambs at the 44kg slaughter weight. The general principle of supplementing lambs for fast growth and finishing as soon as possible rather than slow growth in anticipation of an autumn break reduced the overall feed cost to finish the lambs held when tested over the 46 years. Sheep enterprises that have no wool income (Dorpers) inheritably carry more market risk as they are totally reliant on the sheep meat market. Profitability is also more sensitive to variation in reproductive rate (RR). Conclusion The variation in profit/ha between enterprises is minor compared to variation between years and within enterprises. No one sheep enterprise is by far and away superior to any others over the long term. An issue that warrants further investigation is the financial impact of joining ewe lambs at 7 to 10 months of age to lamb at 12 and 15 months. Initial results indicate this will improve profit per hectare for those enterprises that are self replacing given that in this analysis; the ewe lambs are being supplementary fed to achieve joinable weights at 7 or 10 months of age. These results are different from the current view within industry because in the modeling we have held constant the amount of grass eaten and expressed all results as dollars/ha. When producers change enterprises they change a range of factors and results are usually discussed on a dollar/head basis. These 2 factors mask the truth. Gross margins do not accurately account for production differences that occur between breeds unless the production factors are taken from modeling work. The next extension of the work is too add the potential change to weather data for the future and look at the impact on the different enterprises and what changes can be made to lower any potential impacts of climate variability. As the confidence in farm systems for the Monaro builds this work can be applied to Monaro systems to get local data. For all enterprises, the basic assumptions are important, we have tried to use what we believe are industry averages. A different set of breed characteristics or replacement costs make substantial changes to the results as seen in part B of the paper. The genetic potential and how well the enterprise is managed will have greater impact on profitability than the enterprise itself. This analysis also assumes the managerial ability to extract the assumed performance from the enterprise. This is not always the case as a different skill set will be required to finish lamb for example and be a significant factor in enterprise choice. The capacity and fertility of the basic land resource cannot be ignored. If your country s capacity results in requiring an increased amount of grain to finish lambs, that will have a negative impact on the relative enterprise performance (higher supplementary feed costs). In some environments the best option would be to sell all lambs off as stores. This has not been assessed. Page 4

5 Table 1: Description of enterprises evaluated Enterprises evaluated Code 2 nd Cross Lamb from 1 st X ewe PL Dohnes lamb sold at 44kg DI Dohnes lamb sold at 50kg later lamb shearing D2 Samm S Merino Ewe joined to Terminals MT Merino Ewe - 18µm lambs sold at 44kg M-18L Merino Ewe - 18µm all lambs shorn & sold at 15 mths M-18Y Merino Ewe - 20 µm lambs sold at 44kg M-20-L Merino Ewe - 20 µm all lambs shorn & sold at 15 mths M-20-Y *The prices for both wool and meat are the five year averages for the period Table 2 Costs Overhead costs Grain Fertiliser Shearing $100/ha $280/tonne $30/ha $5.74/hd Table 4 Breed Characteristics and Results for Yass PL D1 D2 S MT M-18L M-20L M-18-Y M-20-Y Total Expenses ($/ha) Profit ($/ha) Variability of Profit ($/ha) Impact of Prices and Costs Profit $/ha yr ave 2009 ave 22/01/ Prime Lamb Dohnes Merino X Terminal Sheep Enterprises 18 um Merino finish lambs 18 um Merino sell at 15 months Page 5