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Grazing demonstration returns profit in first year

A local grazing demonstration has just completed its first 12 months and is already showing positive signs. The paddock-scale demonstration, established on Shannon Arnall’s property “Carinya” is investigating the level of production can be sustainably achieved on a native-based pasture in the Crookwell region.

Shannon recently purchased a new block of ‘native’ country and was keen to increase profitability in the most cost-effective way. A simple nutrient trial showed that phosphorous was the major nutrient limiting plant growth, especially sub-clover.

That wasn’t overly surprising given the history of the paddock, however the question then became: does it still pay to put fertiliser out in a wool operation? To answer this question, an area near the nutrient trial was fenced to create 3 x 7 hectare paddocks.

The selected treatments were:

Paddock 1: Single superphosphate + lime – fertiliser and lime applied to the native pasture to increase soil phosphorous (P) and reduce soil acidity (pH).
Paddock 2: Control – a native pasture of low fertility (i.e. the “do nothing” approach)
Paddock 3: Single superphosphate – fertiliser applied annually to increase soil P to a targeted level

Lime was applied on 9 January 2015 at a rate of 2.5t/ha. Single superphosphate (with Molybdenum) was applied to the fertilised treatments on 1 February 2015 at a rate of 125kg/ha.

The reason superphosphate was selected is because it is one of the most cost-effective ways to apply P to a grazing system. This has been proven in a long-term fertiliser trial at Bookham (2009 - 2014). Superphosphate also provides adequate amounts of sulphur – another key nutrient that is often deficient in pastures. Lime was also chosen to be applied across one of the treatments to see what impact it has on pasture growth and stocking rate.

Prior to the paddocks being used for the demonstration they had not received super for at least 13 years. The pastures are mainly microleana and danthonia, annual grasses with sub-clover. The paddocks are good, dense native-based pastures on an acid soil with pH 4.0 – 4.3, with increasing aluminium to depth.

Merino wethers were shorn in December 2014 and allocated to treatments on 14 January 2015. The control paddock was allocated 35 wethers (5 DSE/ha) and the two treatment paddocks received 45 wethers (6.4DSE/ha). The aim with this demonstration is to monitor body weight and adjust stocking rates accordingly so that body weight and wool characteristics remain similar across the treatments. Over time it is expected that stocking rates will gradually increase in the fertilised paddocks as soil fertility and pasture production increases.

Season wise, 2015 proved to be a rather interesting year. The season broke in April, however winter was particularly tough with the region receiving 30cm + of snow in mid July. Although there was good soil moisture at the end of winter, lack of rainfall in September and October meant that the top soil dried out, restricting pasture growth. In the end 2015 was deemed to be an 'average' year.

Wethers from all three treatments were shorn on 10 December 2015. Individual fleeces were weighed and tested for micron, staple length, staple strength etc. This information was then used to calculate a full economic comparison which is presented below.

Table 1: Grazing demonstration results: January 2016

INCOME    
  ControlSuperSuper + lime
Production    
Area of paddock*ha6.325.136.2
Number of wethersper paddock354545
Stocking rateper ha5.58.87.3
GFW (kg)per head4.54.44.7
Clean wool (kg)per head3.163.053.30
Micronaverage18.417.618.0
Production    
Clean Wool (kg)per ha17.4926.7323.98
Wool Price (Dec 2015)cents/kg clean147015141500
     
WOOL INCOME ($/HA) 257.09404.71359.71
     
COSTS    
Variable Costs$/ha   
Animal health ($2.00/hd) 11.0817.5414.52
Wool harvesting and selling costs ($12/hd) 66.46105.2687.10
Fertiliser costs 06085
Feeding costs 000
TOTAL VARIABLE COSTS 77.53182.81186.61
     
Interest on stock (6% interest @ $80/hd) NA15.528.26
     
TOTAL COSTS 77.53198.33194.87
     
PROFIT    
$/ha 179.56206.38164.84
Difference (to control)  26.82-14.72


* Paddock areas were adjusted to take into account grazing area lost to Bracken fern (i.e. some paddocks had more bracken than others. A handheld GPS unit was used to map out the amount of bracken in all treatments.

Key points:

  • The application of P at the beginning of February 2015 had an immediate impact in the first year. The two fertilised paddocks responded, growing more pasture and were able to sustain higher stocking rates (+ 28%) than the control.
  • Higher stocking rates meant the fertilised paddocks cut more clean wool per hectare:
    • control: 17.49kg/ha;
    • super : 26.73kg/ha;
    • super + lime: 23.89kg/ha
  • When all the costs are taken into account (i.e. the costs of fertiliser as well as extra variable costs of running more stock), the super only treatment generated $27/ha in profit. This extra income has been achieved in the first year of application in an ‘average’ year. It is expected that the returns from applying superphosphate will increase in the coming years as a result of:
    • Slightly lower fertiliser cost/ha. Mo super was applied in the first year – Mo won’t be needed for at least 5 years, thereby reducing the cost of fertiliser by around $5/ha.
    • Gradual increase in stocking rate as a result of additional soil fertility, including higher soil nitrogen levels from increased sub clover growth.
  • The additional cost of lime combined with a lower stocking rate (compared to the super only treatment) meant that the super + treatment didn’t reach a break-even point in the first year.

Matthew Lieschke
Senior Land Services Officer - Livestock, Goulburn
Matthew.Lieschke@lls.nsw.gov.au