Suslainable Forage-based Livestock Syslems in the Ttopies

Chapter 7

Beef industry:constraints and opportunities

Table 7. 1. Farm debt in QueenslandThe key to the sustainability of forage-basedlivestock systems in the tropics is the hurnancomponent. Managers of livestock systems managedefined areas of land for the purposes of achieving a

desired life style for themselves, their families and insome cases for the stakeholders in a company. Moneygenerated to fund the life style is determined byavailable markets, prices and costs, and the qualityand volume of product.

This paper is about the constraints and opportunitiesfacing tropical beef enterprise managers in northemAustralia. It is based on analysis of a range ofmanagement options and their economic impact fordifferent production situations.

Maior Australian farmindustry constraintsProfitability

Australian agricultural industries are not Profitable!

Average retums to capital for the Queensland beefindustry over the last three years have been 0.3%(9L/92), - 0.1% (92/93) and1..2/" (93/94). The averageAustralian farm business 'profit'in 1993-1994 wasnegative 94290. For 1994-1995, ABARE estimates itwill be negative $13 000. Sixty-seven percentof Australian farms have a negative business 'profit'.Average farm debt as at June !994 was $1'4O 260.

TableT. L shows that farm debt has risen faster in thebeef industry than in wool and broadacre enterprises.

In 8 years from 1985-1,993bee1herd productivity rose

about 17"/o arrd exports by a massiveT?lo to 802

kilotonnes. In the same period the average dressedweight price of export cattle fell by L8% in real terms(ABARE farm survey L994).

Against these financial constraints, capital intensiveopportunities may be inappropriate for many beefenterprises.

Beef$

Wool Broadacre$$

1989/901990/911991/9219e2/931993/94

99 000

L20 000159 000185 000206 000

173 000 125 0002L0200 L34 000212000 170000275000 L790ffi204000 181000

Source: ABARE Farm Survey Report L994

Broadacre includes all grazrng and grain industries

Markets

Enterprise managers are constrained by the number ofmarkets available to them. The number of marketoptions available to a producer (with givennaturalresources/ climate and price structures) is determinedby the growth rate (weight for age) of cattleachievable from the given natural resources, theirlikely carcass characteristics (Figure 5. 1.L, Chapter 5),

and the costs of meeting the market. Assuming themarket specifications can be met, the volume ofproduct and the costs determine the amount of profitthat is made by the enterprise in the short term. Inthe long term, the health of the natural resourcesplays a critical role in sustaining profit (Coffey 1994).

Opportunities

To maximise profit within a given market and pricestructure, m€magers need to:

. optimise volume of product by improving bothcattle growth rates and reproduction rates

. minimise death rates

. improve product quality

. reduce costs.

Page 95

Sustainable Forage-based Liveslock Sysfems in f\e Tropics

Cattle gro\Mth rateIncreases in growth rates decrease the age of fumoffand increase the furnover rate or volume ofproduction per unit time. tt is important todistinguish between these two concepts.

Reducing age of turnoff

Average ages at which the four pairs of permanentincisor teeth erupt are about 25,33,41. and 50 monthsIor Bos indicus xBos taurus steers. It must be notedthat there is a wide variation between animals whenthese pairs of teeth erupt. The ages at which moststeers have less than a given number of teeth are ofmore interest because specifications state a maximumof 0,2,4 or 6 teeth (Rudder L993a).

Ages at which one ctu:t expect 95"h of Bos indicus xBostaurus steers to meet specifications for a maximum of0,2,4 arrd 6 teeth are about 23,29,36 and 44 months,respectively. This information canbe used withliveweights required for a given market to estimatethe post-weaning liveweight gains necessary to satisfyage specifications (Table 7.2). For example, assumingan average weaning weight of 185 kg at six months ofage, post-weaning liveweight gain has to average 0.5kg/day to reach 635 kg liveweightby 35 months ofage (4 teeth) to meet premium |apanese markets.

Ensuring that steers regularly reach these liveweightsby this age is a constraint to overcome. Arrnualliveweight gains for steers grazingimproved or goodnative pasture appears to be approximately 0.4kg/day, but ranges from 0.3-0.6 kg/day depending on theseason, stocking rate and soil fertility. These pastureswill regularly produce 300-360 kg steer carcases withsix or fewer teeth (under 44 months of age). Annualvariation in slaughter weights is generally smallbecause seasonal conditions tend to average out overthe years between weaning and slaughter for a typical

Central Queensland marketing system (Rudder1993a).

However, the trend for premium grassfed marketsseems to be a maximum of four teeth (or about 36months) at slaughter. This reduces the time fromweaning to slaughter, and hence the benefits fromseasonal averaging. The end result is that higher ratesof gain are needed. These factors increase the need toevaluate the case for grain supplements to cope withadverse seasonal conditions, and the use of crop andpasture programs to optimise liveweight gains whenseasonal conditions permit (Rudder L993a).

Increasing rate of turnover

Tumover rate is an important concept because manyforage livestock systems, particularly those that arebased on more than one generation of progeny on aproperty before sale, are very sensitive to increases ingrowth rate. Table 7. 3 shows an 18% increase inannual growth from 130 to 150 kg results in greaterprofits than an L8% increase in reproduction from 70to 85%. This happens because a large proportion ofprogeny reach market specifications a year younger.The impact on profitability of increased growth rateon turnover is a concept not well understood bymany managers in the beef industry (Clark 1995).

By tuming off all progeny ayeil younger, extraforage becomes available to:

r reduce stocking pressure

r increase breeder numbers.

However increasing breeder numbers, and reducingthe number of saleable progeny in an enterprise couldhave negative implications for drought management.Replacing breeder stock after droughts isproblematical.

Table7.2. Approximate post-weaning liveweight gains required to achieve age restrictions for a range ofcarcase weights based on a weaning weight of L85 kg at 5 months of age (Rudder 1993b).

Weight required daily or annual (brackets) post-weaning liveweight gain (kglhead) for 0-6 teeth

Carcase

L60-2002W-240240-280300-360

0 teeth

O.ss (2oo)0.8 (2e0)0.5s (240)na*

2 teeth 4 teeth

na*na*0.4 (14s)0.s (180)

6 teeth

na*na*0.3 (110)0.4 (14s)

Live

345425500635

na*0.350.50.6

(180)(220)

* Considered to be generally not applicable.

Page 96

Suslainable Forage-based Livestock Syslems in the. Tr'opics

TabIe7.3. The relative impact of increases in growth rate and reproduction rate on the profitability of atypical central Queensland black speargrass beef enterprise, targeting jap ox miukets (Cheffins pers. comm.).

Weaning rate Growth rate % turnoff by31hyearc

Gross margin

TypicalIncreased reproductionIncreased growth

707"85%70"/"

130 kglyear130k9/year1.60kg/year

25%?s"/o

100o/.

$118 000$123 000$140 000

fmproving growth rateimproved grass species

Livestock growth rate is strongly influenced by theenvironmental components of rainfall and soilfertility. There are also other factors andmanagement options which impact significantly ongrowth rate (Figure 7.L). Growth rate is improvedthrough:r nutritiono animalbreedingr disease control.

Nutrition

In forage livestock systems nutrition may beimprovedby:

r pasture memagement tactics (fire, spelling,stocking rate, tree and weed management)

TableT. 4. The impact of increases in growth rate and reproduction rate on a 4 000 ha black speargrassenterprise keeping the stocking rate constant at 935 beef equivalents. The current enterprise targets the |apaneseOx market. It is assumed that the cost of using bulls of different genotypes would be no more than currentpractice. It is also assumed that bull selection is done within the herd therefore there are no additional costs. Itwas estimated that the legume establishment would cost $30 000, therefore the break-even point would bereached in the Sth year and the enterprise would continue to be $30 000 more profitable than the currentpractice (Clark 1993).

. legume augmentation of pasfures

. tree legumes

. supplementary feeding

o the use of growth promotants.

Improvements in nutrition generally have a moreprofitable impact than animal breeding. For example,the analysis in Table 7. 4 shows there are greaterbenefits from legume augmentation of black speargrass production systems compared with two animalbreeding options, although legume augmentation isalso more capital intensive.

The enterprisenow - currentbest practice

The enterprise inthe 5th year ofcross breeding

The enterprise inthe 20th year ofbull selection onIndex

The enterprise inthe Sth year oflegume augmentationof pastures

Growth rateReproduction rateDeath rateLrvested capitalValue of outputVariable costsGross marginFixed costsOperating profitManagers salaryRetum to capital

AmountPercent

Tumover rate -7o of steers sold by

130 kglyear70%

1%$1 33s 600g 1.42200$ 24 L00$ 118 100$ 46470$ 71.630$ 20 000

$ s1 6303.86%

3lh.yrs 25%

140k9/year80%t%

$1346968$ 152842g 23116$ L29786g 46490$ 83 236$ 20 000'

$ 623604.70%

65"/o

170k9/year80%1%

$1 361 500$ 178 350$ 24900$ 1s3 4s0$ 46450$ 107000$ 20 000

$ 870006.40%

100%

1.60kg/year8A%10/LlO

$1 406 500$ 175 000$ 25 000$ 1s0 000$ 46 4s0$ 103 550$ zo ooo

$ 835s05.94%

100%

Page 97

Suslainable Forage.-based Liveslock Systems in the Tropics

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Page 98

S uslai nable Fo roge-based Livestock Systems i n lhe Trop ics

Pasture improvement and supplements

Foran et al. (1990) compared eight improvedmanagement technologies for a typical NorthemAustralian beef cattle property carrying about 3000breeding cows located in the Katherine district of theNorthem Territory. The options includedcombinations of cow and steer supplementation, andpasture improvement with Stylosanthes spp.

Over a 2}-year period the predicted accumulated cashsurplus for the superior cow herd supplementation,cow and steer herd supplementation, and pastureimprovement options were $0.66m, $1.12m and$1.32m respectively. After real interest rates of 6%were charged on borrowed capital and companytaxation was levied, however, the 2O-year netsurpluses were $0.40m, $0.66m and $0.35mrespectively. Annual tumoff rates were 24,21 and19"/o oL herd numbers, but 33,37 arrd 36% of herdvalue respectively. These figures compare to anexpected Z}-yeat loss of $1.40m for an undevelopedproperty in the same area, with a tumoff rate of l47oof herd numbers, arrd L7"h of herd value.

Foran et al. (1990) concluded that successful pastureimprovement can result in a productive enterprise,but there are major capital investment costs duringimplementation, as well as risks of pasture failure. Asa result, supplementation strategies are moreattractive, because they require less capitalinvestnent, and can be suspended in difficultcircumstances. However, supplementation withoutgood land m;rnagement can cause pasfure andlandscape degradation. The principles of riskassessment are important for improved foragelivestock systems.

A maior industry constraint is the lack ofunderstanding of the concept of first limiting factorsin nutrition. When pastures are perceived to be inpoor condition'shotgun' supplementation is generallypractised. The poor adoption of wet seasonphosphorous supplementation practices is also due tothis lack of understanding of first limiting factors(Clark 1995).

The cost/benefit of mineral and crude proteinsupplements for improved growth rate dependson circumstances, particularly prices.Supplementation with energy is generally more riskyand very dependent on circumsttrnces. Growthpromotants generally increase profitability providingnutrients are not limiting.

Tree control and legumes

Mclvor and Monypenny (L994) state that pasturedevelopment by killing trees and/or sowing legumescan have large, positive effects on net cash flow of ahypothetical property. Selective killing of treeswithout further improvement of the native pasturesresulted in an increase in optimum stocking rate (andthus carrying capacity) and net cash flow under mostof the conditions examined. Sowing legumes underlive trees resulted in greater net cash flow than witheither no development or tree killing alone. Thissystem also was less affected by changes in seasonalthough systems where the trees were killed wereless sensitive to changes in stocking rate near theoptimum. The combination of sowing legumes andtree killing gave the highest net cash flow. Theseresults suggest that pasture development usinglegumes can be a profitable investment (Table 7. 5).

Table 7.5. Accumulated net cash flow (AccNCF) ($000s) for four pasture systems in relation to growingseason/ seasonal variability and stocking rate (SR*r. and SRu* are the optimum stocking rates for constantand variable conditions respectively; the values in brackets are the AccNCF as a percentage of theAccNCF for that pasture system and that season with nil variability).

Pasfure system" Season

Poorvariability

Goodvariability

Nil Variable

SRNr SRN,'- SRu* SRN* s\[ S&,"*

Nil Variable

3340406046206550

LNKNLOKO

13501,460

24103020

e0 (7) e0 (7)60 (4) 1s0 (10)1410 (5e) 1480 (61)L71o $n 1,870 (62)

3030 (e1)3600 (8e)4200 (et)s760 (88)

30s0 (e1)3630 (8e)4?20 (e1)5810 (8e)

oL = live trees; K = killed trees; N = native pasture; O = oversown legume.

Page. 99

Suslainable Fo,,oge-bos.d Livestock Sysle^s in $e Tropics

Animal breeding

The appropriate genotype for an environment will bethe one which results in optimum growth,reproduction and survival. [r tropical and subtropicalregions/ high pasture quantity and quality usuallycoincides with high ambient temperatures, tick and/or wonn infestations and incidence of blight.

Zebu (Bos indicus), Zebu British arrd Zebu Europeangenotypes have better heat tolerance, tick resistance,worrn tolerance and resistance to blight than theBritish, European and British European (Bos taurus)genotypes. These stressors depress feed intake, andhence reduce growth and reproductive rates, more inBritish and European genotypes than in those whichhave about half or more Zebu component.

Cattle which have halJ or more Zebu component, havelower maintenance requirements than British andEuropean genotypes. This results in Zebu - infusedgenotypes increasing or maintaining their liveweightlonger into the dry season than British and Europeangenotypes, and losing less liveweight during the laterstages of this se€rson. The capability results in higherannual growth and survival rates (Rudder 1993c).

Gains achieved by selection are slow (less thanL%/year for any one attribute) but they are cumulative.Gains achieved by cross breeding are greater thanthose achieved by bull selection in the short term butneed to be accompanied by selection to achieve thebest outcome.

TabLe7.5 demonstrates the relative benefit of withinherd/bull selection for improved growth and

reproduction in two production systems based ondifferent growth rates, herd structures andinfrastructures. These data show how current herdstructure influences the impact of increases in growthand reproduction rates (Clark et aI.1992).

Table7.4 showed the relative benefit of cross breedingand bull selection for improved growth rate for a herdwithin a structure sensitive to improvements ingrowth rate. However, Table 7. 5 shows that inherds with a different herd structure, the benefitsare less obvious; this concept is not generallyrecognised in the industry (Clark 1995).

Animal breeding technologies do not generallyrequire large capital inputs. Animal breeding alsoenables animals to be breed for improved feedconversion which could be a major factor contributingto sustainable forage - livestock systems.

A major constraint in the industry is the perception(and common practice) that significant genetic gainis achieved by culling females. The reality is that96"/o of the genetic gain of beef herds is achieved bybull selection, selection of females will contribute amaximum of Aoh. This misconception is a maiorconstraint to the adoption of bull selectiontechnologies (Clark 1995).

Another constraint is the lack of understandingabout the importance of setting breeding objectivesthat optimise profitability and are rational in termsof available Estimated Breeding Values (EBVs)(Clark 1995).

Table 7.6. The effect of 20 years of within herd selection for liveweight and weaning rateon income of Central Queensland black speargrass and brigalow production systems (Clark et al. L992).

Annual income and costs ($'000) Speargrass Brigalow

Base Selected Base Selected

Growth ratesReproduction ratesDeath rates 130 kg/yearGross incomeVariable costsGrossmarginFixed costsOperating profitS"l-y ownerNet profit

130kg/year70%10/LlO

1.42.2

24.L11.8.1.

46.57L.620.051..6

l70kg/year80%ao/llo

178.325.0

153.346.5

106.920.086.9

l90kg/year80%t%167.924.0

1.43.9

73.170.820.050.8

203k9/year88%1%178.6

24.6153.9

73.180.820.o60.8

Page 1OO

Sustainable Foroge-bosed Livestock Syslems in lhe Tropics

Disease control

Chronic diseases (".g. 3 day sickness) and extemal(ticks, buffalo fly) and intemal parasites (worms) willdecrease growth rates. The cost/benefit of treatmentsdepends again on:

r the probability of occurrence

r the cost of no treatment (benefit)

r the cost of treatment.

Table7.7 provides an example where vaccinationscontribute to improving profits. Other specificdata on the cost/benefit of treatments is verydependant on local conditions and is difficult tofind.

ReproductionIncreases in reproduction rate have these benefits:

o increases in numbers of progeny for sale

r increase in selection pressure for femalereplacements

r fewer numbers of breeders and greater numberof saleable cattle available for de-stocking

o increase in cull cow sales.

The genetic contribution to improving reproductionby cow selection is very small, this concept is not

understood by most tropical beef managers (Clark1995). Better nutrition, disease control, and bullselection are the keys to improved reproduction rates.

The impacts of improving reproduction rates becomesincreasingly important in enterprises which tum-offweaners and in enterprises where reproduction ratesare low.

Newman (Igg2)draws attention to the implicationsfor the mtmagement of cull cows that are non-pregnant. Cows should be sold as soon as possible forthese reasons:

r the interest that could have been eamed on thecapital tied-up in dry cows

. the value of calves not weaned from dry cows

. non-productive use of available pasture by drycows.

Table 7. 7 shows the benefits of increasingreproduction rates in a weaner producing enterprise.These improvements were achieved by early weaningdown to 3 months, supplementation of youngweaners, breeder supplementation with urea andphosphorus, and vaccination withbotulism and vibriosis and 3 day sickness.

Table 7. 8 shows the impact of early weaning onreproduction, breeder mortality, tum-off percentageand profit.

Table 7 . 7 . Herd structure, tumoff and profit at branding rates of 60"/", 75"/" and 80% (Holmes 199L).

"Millungera" Producer Demonstration Site

Branding Rate 60% 75% 80"/o

Adult equivalentsBreeders matedAverage breeder mortalityAverage male mortality

Male tumoff age (yrs)Male sales numberAverage male sale price ($/hd net)

Female sales numberAverage female sale price ($/hd net)

Supplement and vaccine cost ($)

Herd gross margin ($ before interest)GM/adult equivalent ($ before interest)

1300596

5.3%4.0%

L

t73250

138324

1 300

80 65062.L0

1300593

3.9"/"2.0"/o

L

t99250

1300526

3.9%2.0o/o

1

206250

174328

t2 800

181

34.6

L2890

95 63073.59

91 63070.50

Page 1O1

Sustainable. Forage.-based Livesfock Syslems in the Tropics

Table 7 .8. The impact of weaning system on the breeder fertility, mortality, tum-off percentage andprofitability per breeder in a Kimberley herd (Anon. 1995).

WeaningSystem WeaningPercentage

(%)

Breedermortality

(%)

Turnoff percentage Profit($/breeder)

% of the % of femalestotalherd in tum-off

Traditional system (1 x yr at > 150 kg)Normal (2xyr at 100 kg)Early weaning - 2xyr at L00 kg

- lxyr at 50 kg

5575

115

18

752

51

707885

0384347

13

2426

30

Death ratesIn extensive northem Australian beef enterprisesdeaths rates are often high. Figure 7.1 lists some ofthe practices which contribute to reduction of deathrates. In a 5000 head Kimberley beef herd the savingof only 18 deaths will pay for botulism vaccination. Itis calculated that gross margins can be increased by$6-$7 per head by regular botulism vaccination (Anon1e95).

Production volume,properw size and costsCulpitt (L992) defined economies of size as asignificant reduction in average cost per unit ofoutput as propety size increases. Newman (1990)developed economy of size equations for properties inthe Blackall and Longreach Mitchell grass areas.Newman concluded that the most significant gainsfrom expansion will occur with the movement up to a10 000 sheep flock, which is the estimated point whenthe labour from a small one family operationwillbe tullyutilised.

Hinton (1993) says that in the Dalrymple Shire mostproducers agree that beef property sizes are too small(Table 7. 9). Producers agreed that high debts forcedgraziers to over-stock and that the price of landprevents small property owners from expanding.Hinton (1993) also showed that economies of scaleoperate in the Dalrymple Shire. Larger properties canoperate more profitably by spreading fixed costs overa larger amount of output. Only the paid labourcomponent increases with property size becausemustering labour requirements increase.

Hinton (1993) states that herds need to be between1792 AE and 2658 AE in order to break even with totalresource costs less imputed interest. This wascalculated assuming L0% debt levels and 10% realannual interest rates. Property amalgamation isnecessary for properties less than 1000 AE to achieveeconomic efficiency and to remain viable over the longterm. Larger properties can operate more efficientlyand are more insulated against the effects of droughtand market downtum.

Hinton (1993) found that after allowing for physicaldifferences in country type, properties with smallherds had higher stocking pressure than those withlarger herds. High stocking rates were shown to beassociated with low gross margins per adultequivalent.

Clark ef al. (1992) reported that in the Calliope Shire ofCentral Queensland producers stated that asustainable living area would need to carry L 000 headof cattle or 300-400 breeders and their progeny. Thiswas calculated to be about 935 AE based on a drybeast of 450 kg. These producers also recommend aliving area of 4 000 ha for their type of country.Figure 7.2 shows that 86% of properties are less than2 000 ha (half the recommended area). Lr thisShire some opportunities exist for off-farm income.

Page 1O2

Sustainable Forage-based Livestock Systems in the Tropics

Table 7.9. Reasons for perceived decline in land condition (%) (Hinton 1993).

Property size too smallto support a family

The price of landprevents small propertyowners from expanding

High debts forcedgraziers to overstock

Strongly agreeAgreeNeither agree nor disagreeDisagreeStrongly disagree

15 (4.4s)43 (6.s5)1s (4.58)26 (s.51)

2 (1,.se)1OO"/"

20 (4.e4)63 (6.08)

6 (3.16)e (3.61)3 (1.se)

100%

27 (s.4e)67 (s.ez)

s (2.80)7 (3.1L)0 (0)

L00"/o

0 Standard error

Figure 7.2. The distribution of property sizes and totalarea of properties in Calliope Shire.

Number of properties Total area of properties (hectares)

250,000

200,000

150,000

100,000

50,000

0< 2000ha 2-4000ha >4000ha

Property sizes

Numbers

hr the Calliope Shire of Central Queensland,increasing stocking rates may, in the short term,increase operating profit, as shown in Table 7.10. Thisexplains why producers who are in need of cash flowoverstock. Debt and small property size are thebiggest constraints to achieving sustainable land use.

Product quatiW and costsRudder (1993b) compared options for producingsteers and surplus heifers for different markets(Table 7.1L), artd concluded that supplying the lowerpriced markets (LP) resulted in the highest net retum($50,600). This system is widely used in central andsouthem Queensland and has proved to becommercially robust.

Differences in the cost structure between propertieswill have a marked effect on the margins required tosupport production of younger cattle for premiumpriced markets. Also, the percentage of carcases thatmeet the target market specifications will exert aninfluence on prices realised.

Producing for the premium priced grass and cropfedmarkets (PP), the 90-L50 day grainfed markets (GF)and the yearling 90-120 day grainfed markets (YGF)appears to be a higher risk venture than producing forthe LP market because carcase specifications aretighter, costs of production are higher andmanagement is more demanding. These lactors meanthat occurrences such as delayed sales, lowered prices,and managerial errors assrune increased importance.Judgements regarding the commercial significance ofthese risks can be made only according to individualpreferences.

Page 103

Suslainable Forage-based Livestock Systems in the Tropics

Table7.1.0. Estimates of costs and returns from a 4 000 ha black speargrass beef enterprise at three differentstocking rates (Clark et al.1992).

Stocking Rate 2.3 ha/AE 4.3ha/AE 9.7ha/AE

Annual Liveweight Gain (kg)Total AETotal HeadNumber:

Deaths:

WeaningRate %RegrowthControlDroughtCosts

Operating ProfitRetum to CapitalRetum to Capital

WeanersBreedersBullsCowsGrowers

100L7242226

6211032

3L

n Q..9'/")12 (2.L'1,)

60@$40/haL in5II1748860368603

4.0

130935

LLU330472

L4tl(2.4"/,)5 (1.6"/")

70@$20lha1in6

M676tM04L41lO

3.0

1504t7484LM180

62(L.8%)2(L5%)80

@$5/ha1in8L343L7824-21764.2

400,ha/yrf. in x yrs$/yeatsso//o

1 AE = 450 kg steerDrought:Sales - Typical enterprise

Feed2/3 of breeders50%27 month stores (mean weight 320 kg @$L.02/kg);50% M month bullocks (mean weight 58Q50% @ fiL.22 / kg, 50% @ $ L.LO / kg, mean price = $1. 1 6);LOO% 32 month cull heifers (mean weight 388 @ $0.96)

Table 7. 11. Estimated gross sales, production costs and returns (Rudder 1993b).

Production PPLP GF YGF

Gross SalesCullcowsSurplus HeifersSteersCullBullsMiscellaneous

TOTALSALES

CostsVariableFixed

TOTALCOSTS

NET RETURN

47 26028t30

t23 4903 5401 500

203,920

23620t297ffi

153 320

50 600

55 35033 &O

156 0410

4 1501 500

250 680

51 4L0L52820

204230

46 450

64 10028 000

1762ffi4 8001 500

2746ffi

100 4140

L49O40

249 4ffi

25240

82670361L0

L35 62062001 500

262tm

98130L49O4o

247 170

t4930

LP = lower priced grassfed marketspp = premium priced grass and cropfed marketsGF = 90-150 day grainfed marketsYGF = yearling 9O-L20 day grainfed domestic and export markets

Pog. 104

Susfainable. Forage-based Livestock Syslems in the Tropics

DroughtDrought represents the risk that existing agriculturalproduction may not be economically andenvironmentally sustainable, given variations in boththe nature and the extent of the rainfall and in theresponsiveness of the farming or grazing system tothis rainfall. This may be due to the degree of climaticvariability and/or to

-inappropriate, or ill ti-ud, o,

inflexible, levels of production. These include the riskof severe land degradation by erosion, salinity oralkalinity; the risk of a permanent mn down in thecapital and resource base of the enterprise; and therisk of unsustainable cash flow. Thus the risksassociated with drought are on par with the risksassociated with the economic pressures that affect thestrucfure of farm costs, and the risks associated withcommodity market conditions which determineproduct prices. Variability in these three factors ofclimate, farm costs and product prices combine toproduce the highly variable environment faced byproducers in North Queensland.

ConclusionLow profitability,lack of capital and relatively smallproperty sizes are major constraints to realisingopportunities for developing sustainable forage basedproduction systems. The provision of off-farmemployment opportunities could make a significantcontribution to addressing financial constraints. Ifcapital is available it is often more profitably investedoff-farm.

The following are some low capital, on-farminvestment opportunities:

r bull selection

. cross breeding

r better matching herd nutritional demands withseasonal nutrient supplies (controlled mating)

. early weaning

o mineral and protein supplementation

. use of certain vaccinations

. use of growth promotants

. legume augmentation of pasfures

. tree management.

More capital intensive on-farm investrnent optionsare:

. energy supplementation

r tree management

o improved pasfure establishment

. tree legume establishment

. land acquisition.

Many of these opportunities are not practised acrossthe northern Australian beef industry (Clark L995).There is also a lack of understanding of someimportant concepts and principles necessary to enablemanagers to utilise current knowledge aboutimproved practices. If current knowledge were to beutilised, and practices changed, the industry couldbe dramatically improved.

The ineffectiveness of current information systems is amajor industry constraint. Improved informationcommunication systems could achieve more rapidchange if designed to:

. develop motivation in managers

. ensure understanding of key principles

. enable on-going benchmarking of changes

Some key concepts and principles that need to beunderstood by managers in order to implement betterpractices for sustainable forage systems are:

o strategic planning

. risk/option analysis

. TQM andbenchmarking

. climate prediction

o land type capability

r rengeland ecology

. water cycle and water use efficiency

o setting breeding objectives

o genetic gain is slow (< [Y" for within herdselection)

bulls are responsible for 96"h of herd geneticgain

I first limiting factors in nutritionr matching herd nutrient demand and pasture

nutrient supply

. cost/benefit of herd health treatments

. tumover rate

r businessmanagement.

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Suslainable Foroge-based Liveslock Sysfems in the Tropics

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