Profitable pasture production under irrigation

Transcription

1 28 th July 2017 Profitable pasture production under irrigation Basil Doonan Macquarie Franklin

2 Tom Graesser s take-home messages RMU 2016 I agree, but..

3 On average nothing pays. We need to target best practice Pasture management Irrigation management Systems approach With irrigated pastures the whole is greater than the sum of the parts Case studies and comparative analysis confirm this

4 What's that mean There are efficiencies beyond just the inputoutput equation Higher scanning and marking rates Higher rates of turn-off Lower deaths and losses (higher survivability) Reduction in feed maintenance cost

5 Case study CA results BMP irrigation can be 1.8 2t DM/ML (Freeman, 2008) % more than average BMP grazing increases: Pasture grown by 30 50% Pasture quality by 20 30% Survivability

6 BMP irrigation A very useful check - compare your LER with others 45 kg DM/ha/day 33 days since grazing 80 kg DM/ha/day 18 days since grazing

7 BMP irrigation Sprinkler blocked for three days 31 days before photo taken

8 BMP pasture

9 Three systems (same farm) 1. Dryland 600ha average management practice 2. Irrigation 200ha dryland 400ha average management practice 3. Irrigation 200ha dryland 400ha best management practice

10 Assumptions (based on CA data) Pasture production Stocking rate Marking % Replacement rate Dryland average 4 t/ha 11 DSE 95% 20% 0 kg Irrigation average + 4t/ha 22DSE 120% 20% 140 kg Dryland best 6t/ha 15DSE 130% 20% 0 kg Irrigation best + 8t/ha 40 DSE 170% 20% 140 kg N/ha

11 Economics stock Sheep Price $3.10 /kgms $3.10 /kgms $3.10 /kgms 1. STOCK NUMBERS Item Dryland Irrg (Average) Irrig (BMP) Ewes lambed 2,500 3,500 5,700 Stock On Hand at Start (no.) (no.) (no.) Marking % 95% 120% 170% Ewes Joined 95% 2,632 3,684 6,000 Replacements 20% ,200 Lambs sold 80.0% 1,900 3,360 7,752

12 Economics feed 2. FEED BALANCE Dryland Irrg (Average) Irrig (BMP) Total Irrigated Area Dryland Area ,500 1,500 1,500 Pasture Utilisation per Hectare (tdm/ha) (tdm/ha) (tdm/ha) Irrigated Pasture Dryland Pasture Total Pasture Utilised (tdm) (tdm) (tdm) Irrigated Pasture 0 1,600 2,800 Dryland Pasture 2,400 1,600 2,400 2,400 3,200 5,200 Total Feed Supply 2,400 3,200 5,200 Sheep flock (No.) (No.) (No.) Ewes joined 2,632 3,684 6,000 Ewes to lamb 95% 2,500 3,500 5,700 Rams 4% Lambs sold 90% 2,370 3,320 5,400 Ewe replacements 20% ,140 Liveweight sold (kg) (kg) (kg) Average lamb weight Total Kg Lwt 65, , ,496 Feed Requirements per Head (tdm/hd) (tdm/hd) (tdm/hd) Ewes to lamb Rams Lambs sold 4.0 kgdm/kglwt) Ewe replacements Total Feed Requirements (tdm) (tdm) (tdm) Ewes to lamb 1,375 1,925 3,135 Rams Lambs sold ,118 Ewe replacements Total Feed Requirements 2,186 3,061 4,984 Feed Surplus/Deficit Shows surplus here but potential deficits covered by extra grain or 8.9% 4.3% 4.2%

13 Economics capital 3. INVESTMENT Dryland Irrg (Average) Irrig (BMP) Land & Improvements $m $m $m Home farm Dryland Home farm irrigation Total Land and Improvements Stock Ewes to lamb $180/hd $180/hd $180/hd Rams $1,000/hd $1,000/hd $1,000/hd Ewes Rams Ewe replacements $140/hd Total Stock Plant & Machinery Other Assets Cash/Hay/Silage Total Assets Liabilities Mortgage Mortgage Asset Purchase & Stock Lease Total Liabilities Net Worth

14 Economics labour 4. LABOUR EMPLOYED Dryland Irrg (Average) Irrig (BMP) Labour Units (No.) (No.) (No.) Owner/Manager Other/Casual Total Labour Units DSE per FTE 6,575 8,767 9,498

15 Economics net profit 5. BUDGET Dryland Irrg (Average) Irrig (BMP) Lamb sales Lambs 283, , ,000 Cull Stock Sales 31,200 43,600 70,800 Total Income 314, ,600 1,045,800 Sheep Stock Purchases Rams $1,000/hd 26,400 36,900 60,000 Animal costs $12/ewe 30,000 42,000 68,400 Pasture Costs 132, , ,000 Purchased Feed Tractor, Plant & Vehicle Operating 24,450 24,450 24,450 Repairs to Structures & Improvements 22,000 22,000 22,000 Wages/Drawings Including Superannuation 65,000 65,000 87,500 Insurance ,100 7,100 8,000 Admin & General Overheads 18,200 18,200 18,200 Finance Costs 0 75,600 75,600 Depreciation/Capital ReplacementCapital Purchases 10,000 15,000 15,000 Total Expenses 335, , ,150 Net Profit -20, , ,650

16 Economics ROA(M) Dryland (average) Irrigated (average) Irrigated (BMP) Percentage of income -6.7% -29% 39% Return on capital -0.8% -1.2% 9.6% Return on equity -0.8% -4.7% 12.5%

17 Top three take-home messages 1. No technology pays with average management 2. Exceptional management (best practice) changes the equation 3. Whole-farm system analysis is required where there are major changes to: a) the farm s capital base b) The farming system

18 Tools, resources and training Irrigation monitoring (tensiometers, probes) Pasture management (Pasture Principles) Condition scoring (LTEM,PP, DGs)

19 Thanks Basil Doonan Macquarie Franklin