Livestock performance in a varied landscape and climate

© 2017 Jane CourtThe sheep and beef industries are significant contributors to Victoria’s economy. Despite competition for land and water resources and an increasingly variable climate, these industries need to continue to increase productivity to remain profitable. As major contributors of greenhouse gases, particularly methane, reducing emissions is also a challenge for these enterprises when considering alternative food and fibre sources. Financial benchmarking, modelling and emission intensity studies seldom recognise that these enterprises are often grazed on diverse landscapes and in the most variable climates, where options for alternative food production are limited. The co-production of meat and fibre from most sheep breeds is often not well recognised and consistently attributed in greenhouse gas emission allocation. This study aimed to investigate whether the relative profitability of a range of sheep and beef enterprises, change across land class and climate. It also aimed to develop measures of and to provide insight into drivers of flexibility, efficiency and profitability leading to guidance on better placed enterprise choice for environment. Four farm case studies were selected to represent climate and land class variability and modelled in GrassGro™. Each farm had one to three land classes enabling eleven ‘farms’ differing in land class over four locations to be simulated. Diversity of land class in this study represented differences in soil type, depth and fertility, slope of land and pasture species. A range of sheep and beef enterprises were tested across all farms to enable comparisons of profitability, flexibility and enteric methane emissions over a forty year period (1970-2010). Enterprise profitability was estimated as net margin per hectare, to allow for labour requirement differences between the enterprises. Flexibility was explored by considering enterprise profit variability and profit response in the top and bottom 10% of years. Strategies that reduced the effects of poor years (higher profit) and increased or did not reduce profitability in good years were considered to have greater flexibility. Enteric methane emissions were calculated in GrassGro™ and an estimation of total end-product made to address the differences in processing stages of red meat and wool, and provide a measure of emission intensity. To further consider the effects of droughts, studies were conducted to quantify commodity price changes in droughts and early warning indicators. A model using total soil water and the Southern Oscillation Index was tested to investigate the potential for predicting droughts before the onset of spring and so provide opportunity for early decision making to mitigate some of the financial impacts of droughts. Wool contributed most to enterprise profitability when pasture production was lowest, as on unimproved pastures, poor soil types and/or in low rainfall years. As pasture production increased across sites and was more reliable, live weight was a stronger driver of profit and systems that had a high proportion of immature animals, tended to perform the best. The specialist meat sheep enterprises were the most profitable when pasture production was highest, but had the highest sensitivity to climate variability. The spring calving enterprise tested in this study was consistently more profitable than the autumn calving enterprise, although the difference was less when pasture production was lowest. These results support, and help to explain, farm financial analyses that have reported enterprise profitability changes between rainfall or regional zones. Where these results did not reflect modelling studies, it was considered to be due to the range in pasture production at the sites tested in this study, as most of the differences were evident at the extremes in pasture production. Most modelling studies in Victoria use sites with high and reliable rainfall, and/or highly productive pastures. Whilst wool production provided a buffer to the susceptibility to droughts, the ability to increase meat production from the system increased flexibility and enterprise profit. For the prime lamb enterprises, a first cross or self-replacing meat enterprise suited to the climate and land class were equally profitable and able to provide options for increased flexibility by feeding and selling lambs early, joining ewes as lambs and running less ewes. Total pasture production, seasonal pasture supply curves as well as replacement ewe turn over price contributed to the most profitable and flexible strategies. The results help to explain some of the inconsistency in the literature on the contribution of strategies to enterprise profit and add to the discussion on the value of increasing reproduction rates. The method for measuring flexibility in this study provides a more quantifiable measure of the term, and addresses factors other than average profitability, of particular relevance to highly variable climates. As with profitability, relative differences in emissions between enterprises were less and/or changed at the sites with the lowest pasture production. As most modelled studies make estimations on fully improved pastures at high rainfall sites, they may overestimate the relative efficiencies of meat specialist systems over wool or dual purpose systems in poorer pasture and land class environments. Research has identified strategies that contribute to lowering emission intensity, such as increased fecundity, improving the feedbase and/or genotype and systems that have a higher proportion of immature stock associated with higher feed efficiency. Consistent with research, these strategies reduced emission intensity but were also most profitable when flexibility rather than profit maximisation was addressed. Therefore the most efficient systems that were also highly profitable tended to be those that maximised returns in good years and reduced the susceptibility to droughts, compared to those that focused on profitability alone. Strategies to do this were not always the same across sites. Analysis of feed and stock prices in recent droughts indicated that steeper price changes occurred from July onwards, compared to other years. Incorporating proportional price changes in drought years in programs like GrassGro™ would allow more realistic analyses of the potential financial implications of drought. Early warning of droughts could provide the opportunity to mitigate losses by using tactical strategies such as selling surplus stock before prices fall and through early purchasing of feed. An explorative study tested triggers of soil moisture and the Southern Oscillation Index which provided reliable indicators of low decile pasture producing springs, with limited risk of above average springs. Further studies are required to test and validate this across more sites and explore the useability for farmers to make informed decisions. The changes in relative profitability, flexibility and emission intensity across landscapes contribute insight into the variability in performance of farm enterprises, within regions and/or when measured as per unit of rainfall. Hence the ability for some farms to attain enterprise profitability achieved by the top 20% of farms based on profitability per mm of rainfall, may not be realistic or achievable. Whilst the industry is currently pushing to increase reproduction rates in sheep enterprises, this study indicates that strategies to do so may vary across enterprise and land class and may not be the most appropriate strategy or profit driver across all farms. More in depth work is needed to identify profit drivers for sheep meat production across land class and environment, particularly in the less reliable pasture production sites. With predictions of increased climate variability, some areas may need to reconsider the suitability of the enterprise for the location and land capability. Similarly, modelling studies that use only sites with high rainfall and improved pastures may not be able to confidently extrapolate results across the wider Victorian environment and may be underestimating emission efficiencies