Assessing the profitability of native pasture grazing systems: a stochastic whole-farm modelling approach

Grazing enterprises on the Central Tablelands of New South Wales employ a range of different strategies to manage temperate native grassland pastures common in the high rainfall zone of southern Australia. This paper uses a stochastic whole-farm simulation modelling approach to assess the impact of grazing system and stocking rate (SR) on the long-term profitability of a representative case-study enterprise. In particular, the impact of infrastructure costs, debt and downside risk, on whole-farm performance are examined over a 10-year planning horizon. In total, 12 different strategies were modelled under both price and climate risk, with a matrix of three paddock systems (1-paddock, 4-paddock and 20-paddock rotations) and four stocking rates (SR of 3, 4.2, 5.3 and 7 ewes/ha). Profitability was primarily driven by SR. In general, higher SR increased total farm output and annual profits under favourable conditions, although they were also associated with higher costs and greater downside risk in poor seasons, which in turn was magnified by the compounding effect of accumulating debt over time. When SR increased above 4.2 ewes/ha, it had a negative impact on lamb sale weights, resulting in lower prices due to lambs not meeting the ≥40-kg liveweight specification. Although this was offset by increased whole-farm production volumes at 5.3 ewes/ha, declines in profitability occurred at 7 ewes/ha as a result of significant increases in supplement feeding costs, and lambs not meeting sale weight specifications. The analytical scale of the analysis also had an impact on the relative profitability between alternative treatments. When assessed using a partial measure of economic analysis (gross margin per ha), there was little difference between paddock system treatments at the same SR. When the cost of additional fencing and water infrastructure were accounted for at the whole-farm analytical scale, the 20 paddock system was markedly less profitable than the 1- and 4-paddock rotations. This highlights the need for assessing production systems at an appropriate analytical and temporal scale to better understand the relationship between the key drivers of long-term profitability and risk. Overall there were relatively small differences in whole-farm performance between the four best performing strategies in this study. Given the trade-offs between profitability, downside risk, ground cover and feedbase sustainability, the lower risk 1- and 4-paddock systems with a SR of 4.2 ewes/ha are proposed as being optimal.

Climate Clever Beef: options to improve business performance and reduce greenhouse gas emissions in northern Australia

The Rangeland Journal – Climate Clever Beef special issue examines options for the beef industry in northern Australia to contribute to the reduction in global greenhouse gas (GHG) emissions and to engage in the carbon economy. Relative to its gross value (A$5 billion), the northern beef industry is responsible for a sizable proportion of national reportable GHG emissions (8–10%) through enteric methane, savanna burning, vegetation clearing and land degradation. The industry occupies large areas of land and has the potential to impact the carbon cycle by sequestering carbon or reducing carbon loss. Furthermore, much of the industry is currently not achieving its productivity potential, which suggests that there are opportunities to improve the emissions intensity of beef production. Improving the industry’s GHG emissions performance is important for its environmental reputation and may benefit individual businesses through improved production efficiency and revenue from the carbon economy. The Climate Clever Beef initiative collaborated with beef businesses in six regions across northern Australia to better understand the links between GHG emissions and carbon stocks, land condition, herd productivity and profitability. The current performance of businesses was measured and alternate management options were identified and evaluated. Opportunities to participate in the carbon economy through the Australian Government’s Emissions Reduction Fund (ERF) were also assessed. The initiative achieved significant producer engagement and collaboration resulting in practice change by 78 people from 35 businesses, managing more than 1 272 000 ha and 132 000 cattle. Carbon farming opportunities were identified that could improve both business performance and emissions intensity. However, these opportunities were not without significant risks, trade-offs and limitations particularly in relation to business scale, and uncertainty in carbon price and the response of soil and vegetation carbon sequestration to management. This paper discusses opportunities for reducing emissions, improving emission intensity and carbon sequestration, and outlines the approach taken to achieve beef business engagement and practice change. The paper concludes with some considerations for policy makers.