Key Points
FARMERS and graziers across South Australia continue to face interesting challenges in a highly variable climate. The prolonged millennium drought/ drier period has now thankfully been replaced, temporarily at least, by much wetter times- in some cases arguably too wet. There is generally an abundance of feed across the landscape and prices are holding up well, particularly for sheep and wool.
The key to successfully managing a risky environment is to implement robust strategies which allow us to cope with the uncertainties thrown at us by a whole range of events. The strategies which have generally proved successful have evolved over many years and are now regarded as industry standards- like maintaining low debt to equity ratios, running conservative stocking rates, lowering cost of production through good management and attention to detail, maintaining adequate scale, diversification etc.
These strategies are relatively conservative in nature, and that has been important in managing the extended dry times over the past decade. At the same time, profitability of livestock enterprises is heavily influenced by stocking rate- the more feed you can grow and utilise generally the better the return. So there is a strong argument to increase stocking rates when the feed is available to improve financial returns. What we do not know, of course, is how the future seasons will pan out and how soon will poor feed conditions eventuate which will need to be managed.
Any increase in stocking rates has to acknowledge that livestock have special considerations in the face of adverse seasonal conditions. Apart from the financial considerations, there may be additional labour requirements to feed livestock during a drought and no one is comfortable with any land degradation during periods of poor feed growth. The key to improving feed utilisation (i.e. increasing stocking rate) even in the good times is the planning of reliable exit strategies (i.e. reducing the property grazing pressure) when seasons move against us.
Seasonal forecasting has made some good progress in recent years but is still only at the stage of providing general information on broad scale climate indicators, rather than firm information for reliable decision making. We need to base our planning substantially on indicators other than seasonal forecasts.
At the paddock level, assessment of feed on hand, expected pasture growth rates and feed utilisation rates by various classes of animals can provide some very good indications for the future of when paddock feed supply will become an issue and when exit strategies need to be implemented.
Exit strategies need to be tailored for individual businesses and may include strategies such as sale of surplus animals, decreasing area of crop, agistment and supplementary paddock feeding. In most mixed farming systems, confinement feeding is likely to be an important component.
Increasing stocking rates can be a successful strategy but only if the ability to manage seasonal risk is addressed with equal rigour through a planned process. The end result can be a more profitable grazing enterprise which is still environmentally sustainable and fits within the labour profile of the property.
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