Economic risk analysis of different livestock management systems

The Cicerone farmlet experiment, conducted on the Northern Tablelands of New South Wales, Australia, explored aspects of profitability and sustainability under three different whole-farmlet management regimes. The 5-year period over which the treatments were measured occurred over a period of generally below-average rainfall, hence responses to management treatments were limited. A modelling approach was used to estimate profitability over a longer period representing the variable climate of the region. A stochastic discounted cash flow model was developed to estimate economic returns of two of the Cicerone management system treatments scaled up from the farmlet scale (53 ha) to the size of a typical commercial farm in the region (920 ha) over a 20-year period. Several scenarios were used to estimate the commercial-scale returns under different rates of pasture improvement and stocking rates. Over the long-term, Farm A was found to be more profitable but also more risky (in terms of variation around the mean of cumulative discounted cash flow) than the ‘typical’ Farm B management system. If livestock managers choose to adopt a pasture improvement strategy based on renovating pastures and increasing soil fertility, they are more likely to achieve higher net worth with more moderate rates of pasture improvement than those explored on Farm A where a high rate of pasture improvement had been implemented in order to quickly differentiate treatments.

Changes in botanical composition on three farmlets subjected to different pasture and grazing management strategies

As part of the Cicerone Project’s farmlet experiment, conducted on the Northern Tablelands of New South Wales, Australia, between July 2000 and December 2006, this study assessed the effects of varying soil fertility, pasture species and grazing management on the botanical composition of three 53-ha farmlets subjected to different management strategies. Starting with the same initial conditions, the farmlets were managed to reach different target levels of soil phosphorus (P) and sulfur (S); Farmlet A aimed at 60 mg/kg of Colwell P and 10 mg/kg S (KCl40) whereas Farmlets B and C both aimed at 20 and 6.5 mg/kg of P and S, respectively. Pastures were renovated on six out of eight paddocks on Farmlet A, but only one paddock of each of Farmlets B (typical management) and C (intensive rotational grazing) was renovated. Flexible rotational grazing was employed on Farmlets A and B (each of eight paddocks) while Farmlet C used intensive rotational grazing over its 17 major paddocks, which were further subdivided into 37 subpaddocks. This paper focuses on the botanical composition dynamics observed across all three farmlets and the explanatory variables associated with those changes. Eight assessments of botanical composition were carried out at approximately annual intervals across each of the 37 major paddocks distributed across the farmlets and the results for each of 49 species were aggregated into seven functional groups for analysis. The strongest correlation found was a negative curvilinear relationship between sown perennial grasses (SPG) and warm-season grasses (WSG). The most significant factors affecting the functional group changes were soil P, sowing phase, paddock and date. These factors led to significant increases in SPG and correspondingly lower levels of WSG on Farmlet A compared with Farmlet B. Farmlets B and C experienced similar, declining levels of SPG, and increasing levels of WSG suggesting that intensive rotational grazing did not lead to substantial changes in botanical composition, compared with flexible rotational grazing, in spite of the fact that intensive rotational grazing had much longer grazing rests and shorter graze periods than the other two farmlets. Soil P levels were also significantly associated with levels of cool-season annual grasses, legumes and herbs, especially on Farmlet A. In general, the largest differences in botanical composition were between Farmlet A and the other two farmlets; these differences were most closely associated with those plants categorised as sown, introduced, C3 pasture species. The levels of legume were generally low on all farmlets, due largely to the dry seasons experienced over most of the trial. Efforts to increase the legume composition on all farmlets were more successful on Farmlet A than on the other two farmlets due, presumably, to higher soil fertility on Farmlet A. Farmlet C, with its long rest periods and short graze periods, had a small proportion of legumes, due to the competitive effects of the accumulated tall grass herbage between grazings. The ‘typical’ management of Farmlet B also resulted in low levels of legume as well as increased ‘patchiness’ of the pastures and increased numbers of thistles.

The effects of pasture inputs and intensive rotational grazing on superfine wool production, quality and income

A farmlet experiment was conducted between July 2000 and December 2006 as part of the Cicerone Project, which sought to enhance the profitability and sustainability of grazing enterprises on the Northern Tablelands of New South Wales, Australia. A self-replacing Merino enterprise was grazed as the dominant livestock enterprise, together with ~20% of the carrying capacity as cattle, on each of three farmlet treatments: higher levels of soil fertility and pasture renovation with flexible rotational grazing over eight paddocks (farmlet A), moderate soil fertility and pasture renovation with flexible rotational grazing over eight paddocks (farmlet B) and moderate soil fertility and pasture renovation with intensive rotational grazing over 37 paddocks (farmlet C). Prior to commencement of the trial, the three 53-ha farmlets were allocated equivalent areas of land based on soil type, slope and recent fertiliser history. This paper describes the effects of the three pasture and grazing management strategies on the production, quality and value of the wool produced per head, per ha and per farmlet. Up until 2001 there were no differences in wool production between farmlets. Thereafter, significant differences between farmlets emerged in greasy fleece weight per head and price received per kg of fleece wool. For example, the clean fleece value averaged over the 2003–05 shearings for all hoggets, ewes and wethers was 1531, 1584 and 1713 cents/kg for farmlets A, B and C, respectively. There were small but significant differences, which varied between sheep class and year, between the farmlets in average fibre diameter and staple length but less so with staple strength. In general, while the differences between farmlets in staple strength varied over time, farmlets A and B tended to have wool with longer staple length and broader fibre diameter than farmlet C and this affected wool value per kg. Differences in wool income per ha between farmlets grew in later years as the farmlet treatments took effect. In spite of farmlet A having a slightly lower wool value per kg, after taking into account its greater fleece weight per head and its higher stocking rate, the total wool income per ha was higher than on either farmlets B or C. The average gross wool income per ha from 2003 to 2005 was $303, $215 and $180 for farmlets A, B and C, respectively. The highest amount of greasy wool produced was in 2004 when 38.2, 26.5 and 21.5 kg/ha was harvested from farmlets A, B and C, respectively. The fibre diameter profiles of 2-year-old ewes showed similar profiles for farmlets A and B but a significantly finer fibre diameter profile for farmlet C ewes due to intensive rotational grazing. However, sheep on all three farmlets produced wool with high staple strength. Multivariate analyses revealed that greasy fleece weight, staple length and staple strength were significantly positively correlated with the proportion of the farm grazed at any one time, and with soil phosphorus, legume herbage and green digestible herbage thus highlighting the significant influence of pasture and soil inputs and of grazing management on wool production and quality.

Whole-farm returns show true profitability of three different livestock management systems

On the New South Wales Northern Tablelands, sheep, wool and beef cattle production account for most agricultural output. The industries have been challenged in recent years by environmental and economic factors and are therefore looking for modified or alternative livestock management systems that are capable of sustaining profitability. The Cicerone Project aimed to address these issues by comparing three different grazing and pasture improvement systems. Some recent livestock industry analyses have been based on gross margins which do not include overhead costs. This is an important limitation; economic analysis needs to report key whole-farm business performance measures since overhead costs can differ significantly between livestock management systems. A representative farm approach was used to compare the profitability of the three different livestock management systems. Commercial-scale whole-farm and cash flow analyses over a 5-year period were used to evaluate profitability. No particular system could be recommended to graziers because the test period was not sufficiently representative of the long-term climate to make an adequate assessment about their long-term profitability. Nevertheless, it is apparent that whole-farm level budgets are essential for comparing the overall profitability of different livestock management systems. It is concluded that analysts, consultants and graziers should use whole-farm and cash flow analyses to gauge profitability of different livestock management systems particularly where sustainability issues are important.

Integrated overview of results from a farmlet experiment which compared the effects of pasture inputs and grazing management on profitability and sustainability

The Cicerone Project conducted a grazed farmlet experiment on the Northern Tablelands of New South Wales, Australia, from July 2000 to December 2006, to address questions raised by local graziers concerning how they might improve the profitability and sustainability of their grazing enterprises. This unreplicated experiment examined three management systems at a whole-farmlet scale. The control farmlet (farmlet B) represented typical management for the region, with flexible rotational grazing and moderate inputs. A second farmlet (farmlet A) also used flexible rotational grazing but had a higher level of pasture renovation and soil fertility, while the third farmlet (farmlet C) had the same moderate inputs as farmlet B but employed intensive rotational grazing. The present paper provides an integrated overview of the results collated from component papers and discusses the inferences that can be drawn from what was a complex, agroecosystem experiment. The measurements recorded both early and late in the experiment were tabulated for each of the farmlets and compared with each other as relative proportions, allowing visual presentation on a common, indexed scale. Because of equivalent starting conditions, there was little difference between farmlets early in the experimental period (2000–01) across a wide array of measured parameters, including herbage mass, potential pasture growth rate, liveweight, wool production per head, stocking rate, gross margin and equity. Although the experiment experienced drier-than-average conditions, marked differences emerged among farmlets over time, due to the effects of treatments. During the latter half of the experimental period (2003–06), farmlet A showed numerous positive and a few negative consequences of the higher rate of pasture renovation and increased soil fertility compared with the other two farmlets. While intensive rotational grazing resulted in superior control of gastrointestinal nematodes and slightly finer wool, this system had few effects on pastures and no positive effects on sheep liveweights, wool production or stocking rate. Whereas farmlet A showed higher gross margins, it had a negative and lower short-term cash position than did farmlets B and C, due largely to the artificially high rate of pasture renovation undertaken on this farmlet during the experiment. Although farmlet B had the highest cash position at the end of the experiment, this came at a cost of the declining quality of its pastures. Modelling of the farmlet systems allowed the results to be considered over the longer timeframes needed to assess sustainability. Thus, returns on investment were compared over realistic amortisation periods and produced outcomes based on long-term climatic expectations which were compared with those that arose under the drier-than-average conditions experienced during the experimental period. The main factors responsible for lifting the productivity of farmlet A were the sowing of temperate species and increased soil fertility, which enhanced the amount of legume and increased pasture quality and potential pasture growth. The factor that affected farmlet C most was the low proportion of the farmlet grazed at any one time, with high stock density imposed during grazing, which decreased feed intake quality. The paper concludes that more profitable and sustainable outcomes are most likely to arise from grazing enterprises that are proactively managed towards optimal outcomes by maintaining sufficient desirable perennial grasses with adequate legume content, enhancing soil fertility and employing flexible rotational grazing.

Whole-farm management of soil nutrients drives productive grazing systems: the Cicerone farmlet experiment confirms earlier research

The Cicerone Project included a study of three 53-ha farmlets, each subjected to a different management system. The systems varied first in their input of fertilisers and sown pastures and second in their grazing management. Farmlet A undertook a high level of pasture renovation and had soil fertility targets of 60 mg/kg Colwell phosphorus (P) and 10 mg/kg KCl-40 sulfur (S), while farmlets B and C both had a low rate of pasture renovation and targets of 20 mg/kg P and 6.5 mg/kg S. In addition, both farmlets A and B adopted a flexible rotational grazing regime over the eight paddocks of each farmlet, whereas farmlet C, which had 37 paddocks, adopted intensive rotational grazing. This paper first reviews the literature relating to soil fertility research in the summer-dominant rainfall region of the Northern Tablelands of New South Wales, Australia. It then examines whether the soil fertility targets set for the farmlets were attained and how the consequences of fertiliser management measured in this trial related to earlier research findings. Fertiliser applications, comprising both capital and maintenance rates, were based on soil test results but at times were constrained by the availability of finance. Soil tests over 5 years indicated that only nitrogen (N), P and S varied with time within the farmlets while the other indices of soil fertility remained similar. Phosphorus and S levels increased in response to fertiliser applications whereas N levels responded to increases in legume composition, which was stimulated by the higher P and S levels. Multivariate statistical analyses demonstrated that farmlet productivity was driven by P and S fertility and thus the two farmlets with lower P and S fertility (farmlets B and C) had similar but lower levels of farmlet productivity compared with farmlet A. Significant increases in several measured pasture productivity parameters were observed in response to the higher P and S fertility on farmlet A, especially when climatic conditions were favourable. The results of the Cicerone farmlet experiment confirm the findings of earlier research on the Northern Tablelands, and elsewhere in the high rainfall zone, that has demonstrated that higher soil fertility levels and pasture renovation enhance the productivity of grazing enterprises more than grazing management, without imposing significant risks to the environment.

Selection of experimental treatments, methods used and evolution of management guidelines for comparing and measuring three grazed farmlet systems

The Cicerone Project was a collaborative effort by livestock producers, researchers and extension specialists, which aimed to explore the profitability and sustainability of grazing enterprises on the Northern Tablelands of New South Wales, Australia. A major part of the Project was the creation of a moderate scale, unreplicated farmlet experiment. The process of selecting the farmlet treatments and the design of the experiment involved considerable negotiation over an extended period in order to achieve ‘ownership’ by all those involved. The farmlets were designed to compare a typical farmlet (B) as the control with a second farmlet (A), which received higher levels of pasture renovation and soil fertility, and a third (C), which employed intensive rotational grazing management with short graze and long rest periods. Management guidelines were developed for all soil, pasture, livestock and grazing management decisions on the three farmlets. Whole-farmlet data are presented for the pastures sown, fertiliser applied, supplement fed, the stocking rates attained and the pattern of graze and rest periods over the experimental period from July 2000 to December 2006. Over the first 4 years of the trial, pastures were renovated on 71% of farmlet A while 8% of each of farmlets B and C were renovated. The rates of fertiliser applied to the three farmlets varied according to soil test values and the different target values for soil phosphorus and sulfur. In the first year of the trial (2000–01), the annual average stocking rates on farmlets A, B and C were 9.5, 7.9 and 9.1 dry sheep eqivalents/ha, respectively, whereas by the fifth year (2005), the stocking rates were 11.2, 7.8 and 7.4 dry sheep equivalents/ha, respectively. This paper provides details of the general methods used in the farmlet trial, of relevance to a series of related papers which explore all aspects of the farmlet experiment and its findings. It also reports on the selection and definition of the farmlet treatments and describes how the guidelines evolved over the duration of the trial in response to the practical realities of conducting this complex, agroecosystem experiment.

Livestock weights in response to three whole-farmlet management systems

This paper reports changes in livestock weights recorded in a whole-farmlet experiment, which aimed to examine the profitability and sustainability of three different pasture and grazing management strategies. The assessment of liveweights was considered a key component of measuring the integrated effects of the farmlet-scale treatments. The three farmlets comprised a typical management regime, which employed flexible rotational grazing over eight paddocks with moderate soil fertility (farmlet B), a system based on the same grazing management and paddock number but with higher levels of sown pasture and soil fertility (farmlet A) and a farmlet with moderate soil fertility and intensive rotational grazing over 37 paddocks (farmlet C). Early in the experimental period, there were no significant differences between farmlets in the liveweight of any class of livestock. However, from the second year onwards, as the pasture renovation, soil fertility and grazing management treatments took effect, differences in liveweight between farmlets became more apparent and significant. The stocking rate, which was treated as an emergent property of each farmlet, reached a maximum annual average value after 5 years of 12.6, 8.5 and 7.7 dry sheep equivalents (dse)/ha on farmlets A, B and C representing 84, 113 and 51% of their respective target stocking rates which were 15, 7.5 and 15 dse/ha. The liveweights of ewes, both before joining and during pregnancy, varied with year and farmlet with those on farmlets A and B tending to be significantly heavier than those on farmlet C. From 2003 to 2006, liveweights were significantly (P < 0.001) affected by a wide array of factors and their interactions including: date, ewe age, green digestible herbage, legume herbage mass, proportion of farmlet grazed, stocking rate and level of supplementary feeding. The weights of lambs/weaners/hoggets, both pre- and post-weaning, were at times also higher on farmlets A and B compared with those on farmlet C and were affected by a similar range of factors to those which affected ewe weights. Similar relative differences also applied to the liveweights of the other livestock run on the farmlets, namely wethers and non-reproductive cattle. The results suggest that stocking rate was able to be increased towards the higher target of farmlet A due to the higher level of pasture renovation and soil fertility on that farmlet, which led to high liveweights per head as well as the higher stocking rate. However, as the stocking rate increased on farmlet A, the differences between farmlets in liveweight per head diminished and the need for supplementary feeding increased. In contrast, the intensive rotational grazing practised on farmlet C did not allow the farmlet to increase its stocking rate towards its higher target. It appears that the higher proportion of each of farmlets A and B grazed at any one time allowed all classes of livestock to reach higher liveweights per head than on farmlet C, due presumably to the greater proportion of those two farmlets grazed at any one time.

Reflections on the concept, conduct and findings of the producer-led Cicerone Project

The Cicerone Project began as a producer-led partnership that sought, over a period of 8 years, to enhance the profitability and sustainability of livestock enterprises by improving the connection between those producers, research and extension. Following a detailed survey, the research and extension needs of livestock producers were identified and several applied investigations were conducted to meet those needs and delivered through a range of extension activities. This final paper of the Cicerone Special Issue reflects on the entire Project from a wide array of perspectives, including livestock producers, researchers, extension specialists and staff employed by the Project, all of whom are authors of this paper. A notable early successful outcome of the Project was the improved precision of footrot diagnosis, which has been of value to the entire sheep industry, and that flowed from a field investigation of benign and virulent footrot combined with detailed genetic investigations, which led to an improved testing regime. This paper also reflects on the findings of an unreplicated agricultural ecosystem research trial, which measured the impact of pasture renovation, increased soil fertility and grazing management on the profitability and sustainability of three different 53-ha farmlets. Valuable findings from this whole-farmlet trial included the need for a high quality feed supply for increasing stocking rate and animal liveweights; the ability and utility of satellite imagery to detect changes in pasture growth, composition and recent grazing pressure; the value of short grazing and long rest periods for controlling Barber’s pole worms of sheep; the impact of increased stocking rates on whole-farm profitability and risk; methods of optimising decisions relating to pasture renovation, fertiliser applications and grazing management; and an integrated analysis of all key measured components of the farmlet management systems. Collectively, these findings were powerful as they were demonstrated at a scale credible to livestock producers using the ‘compare – measure – learn – adopt’ approach, which was the key philosophy adopted by the Cicerone Project. By comparing and measuring different whole-farm systems, and by ensuring that producers had ownership of the trial process, the Project successfully delivered objective findings that producers trusted and which increased our understanding of important drivers of complex grazing enterprises under variable climatic conditions. Some of these drivers included: the influence of soil phosphorus on botanical composition and subsequent livestock production, the role of pasture renovation and soil fertility on herbage supply, herbage quality and stocking rate, and the improved gastrointestinal nematode control delivered by intensive rotational grazing. The beneficiaries of the Project included the 180 farmer members who participated in some 61 field days and workshops; the research and extension collaborators including four postgraduates who completed their research investigations in conjunction with the Project; and some 500 undergraduate and 300 technical students who benefited from coming to understand the applied field comparisons of the three whole-farmlet systems. Having livestock producers play a significant leadership role led to valuable outcomes achieved with research collaborators; this should encourage the development of other learning partnerships which aim to explore complex farming system issues.

Delivering extension and adult learning outcomes from the Cicerone Project by ‘comparing, measuring, learning and adopting'

The Cicerone Project was a partnership between livestock producers, researchers and extension specialists on the Northern Tablelands of New South Wales, Australia that investigated several complex grazing enterprise issues between 1998 and 2006. It was conducted as a Participatory Action Research project, which first surveyed livestock producers to learn of their problems and then carried out investigations according to the Project’s chosen motto of ‘compare – measure – learn – adopt’. The Project included research into footrot diagnosis and an investigation of whole-farmlet livestock and pasture management systems complemented by a multi-faceted extension and education component, which delivered findings to a wide array of stakeholders across the Northern Tablelands and adjacent regions. This paper describes the extension and education methods and outcomes and reflects on how successful the engagement of livestock producers was through a partnership, which focussed on co-learning by all participants. Several different communication approaches were used including the production of 40 newsletters and the delivery of 61 field days. Collaborators also held two symposia, which presented comprehensive overviews of the research results. In the final year of the Project, a roadshow was held to communicate results to a wider audience in neighbouring districts. The results of the two footrot trials, which were conducted as Participatory Action Research projects, led to rapid and substantial changes in the testing regime for virulent footrot, resulting in large savings for livestock producers through more accurate detection of the disease. Other valued extension and industry outcomes were the ability to compare the biophysical and economic performance of different whole farmlets, an appreciation of the value of the whole-farm system approach, the trustworthiness of the results and the stimulation of livestock producers to think more deeply about their management systems, stocking rate and risk. The Project benefited from the research efforts of four postgraduate students and was of benefit to ~300 high school and technical college students and also some 500 university undergraduate students who undertook learning projects in conjunction with Project members and collaborators. This Special Issue of 24 journal papers represents a substantial delivery of the findings from this complex agroecosystem Project, which broke new ground in terms of securing much closer working relationships between livestock producers, scientists and extension specialists. Ultimately, this volume will allow extension of the results of the Cicerone Project to reach a wider audience than has typically been achieved through other Participatory Action Research projects.