Improving profitability and resilience of grazing businesses in Queensland – Preparing for, responding to, and recovering from drought

The project  |  Key messages

Multimedia |  Spreadsheet tools  |  Case studies and articles

Scientific journal publications  |  Further information

Reports

The project

Department of Agriculture and Fisheries, Queensland staff are investigating a range of management strategies and technologies aimed at making Queensland grazing businesses more profitable and drought resilient. This work was initially funded by the Queensland Government’s Drought and Climate Adaptation Program (2017-2021) with ongoing work supported by the GrazingFutures Livestock Business Resilience Project (2022-current). Economic analyses have been conducted to assess strategies and technologies relevant to grazing regions across Queensland. In addition, resources have been developed to support decision-making during drought response and recovery phases. The results and recommendations are available in project reports and scientific journal publications. Additionally, spreadsheet tools and recorded presentations are also available. Collectively, these resources can assist livestock producers to make profitable decisions for their businesses.

Project reports

Fitzroy NRM region of central Queensland

A report summarising results for the Fitzroy NRM region of central Queensland is available for download: Fitzroy beef production systems – Preparing for, responding to, and recovering from drought (PDF, 3 MB).

In this region, assessment of alternative beef production strategies included:

• • • leucaena, other legumes, forage oats, feedlotting and HGPs for steers;
    • better genetics for fertility, reducing foetal/calf loss, pestivirus management, inorganic supplements to address phosphorus deficiency, and feeding first calf heifers for breeders; and
    • alternative markets such as organic beef, EU and Wagyu.

Lower cost strategies to improve drought resilience, as well as drought response and drought recovery strategies, were also assessed.

Northern Gulf NRM region of Queensland

A report summarising results for the Northern Gulf NRM region is available for download: Northern Gulf beef production systems – preparing for, responding to and recovering from drought (PDF, 4.5 MB).

In this region, assessment of alternative beef production strategies included:

• • • addressing a decline in land condition through a reduction in stocking rates and systematic wet season spelling;
    • adequate wet season phosphorus supplements for all cattle;
    • stylos, leucaena, production feeding, silage, agistment and changing age of turnoff for steers; and
    • better genetics for fertility, home-bred bulls, reducing foetal/calf loss, and feeding first calf heifers for breeders.

Lower cost strategies to improve drought resilience, as well as drought response and drought recovery strategies, were also assessed.

Central West Mitchell Grasslands of Queensland

A report summarising results for the Central West Mitchell Grasslands region is available for download: Central West Mitchell Grasslands — Management strategies for drought resilience (PDF 6 MB)

For this region, an integrated pasture and beef herd modelling approach was developed to allow the impact of climate variability on a range of grazing management scenarios to be modelled. This bio-economic evaluation found that setting livestock numbers based on safe pasture utilisation rate principles, but adopting a moderate degree of flexibility in altering livestock numbers in response to pasture availability, is likely to be the most profitable approach to grazing management while maintaining pasture and land condition over time. However, it was essential to economic viability that re-stocking occurred as soon as possible once good seasonal conditions returned.

Tactical strategies that may be applied in response to drought were also assessed in this report.

Northern Downs region of Queensland

A report summarising results for the Northern Downs region of Queensland is available for download: Northern Downs beef production systems – preparing for, responding to and recovering from drought (PDF, 2.7 MB).

In this region, assessment of alternative beef production strategies included:

• • • • increasing age of steer turnoff, and optimising cow and heifer culling age;
      • HGPs, and molasses production mix for steers;
      • home-bred bulls, better genetics for fertility, reducing foetal/calf loss, first mating heifers as yearlings, and supplementing first-calf yearling heifers;
      • converting from breeding to steer turnover, transferring steers from a Northern Gulf property to the Northern Downs property when both were owned within the same business, purchasing a Northern Gulf breeding property, and purchasing a steer growing and finishing property in the Dawson-Callide; and
      • managing prickly acacia.

Rangelands of central-western Queensland

A report summarising results for the rangelands of central-western Queensland is available for download:  Rangelands of central-western Queensland – building resilient and diverse livestock production systems (PDF, 3.8 MB).

In this report, the following alternative livestock enterprises were assessed for profitability and resilience:

• • • self-replacing beef cattle herd
    • steer finishing
    • self-replacing Merino wool flock
    • Merino wether sheep
    • meat sheep, and
    • rangeland meat goats.

In addition, the value of integrating or fully adopting several of the alternative enterprises, from the starting point of either a self-replacing (1) beef cattle herd or (2) wool sheep flock, was investigated.

Mulga Lands of south west Queensland

A report summarising results for the Mulga Lands region is now available for download: Mulga lands production systems preparing for, responding to and recovering from drought (PDF, 3 MB)

In this region, assessment of alternative beef production strategies included:

• • • • implementing the safe carrying capacity through a reduction in stocking rate;
    • weaning, pregnancy-testing and basic vaccinations;
    • increasing the age of steer turnoff from yearling steers to 18 months;
    • inorganic supplements in the dry period (S, P, N) and/or growing period (S, P);
    • converting from breeding to steer turnover;
    • controlled mating;
    • feeding whole cottonseed to the breeder herd
    • buffel paddock development; and
    • destocking in response to dry periods through a) livestock sales or b) sending breeders on agistment.

In addition, the alternative investment options of rangeland goat production and carbon farming were assessed.

Key messages

Steps in drought and disaster preparedness

1. 1. 1. Identify and achieve optimal a) breeder body condition, b) herd/flock structure, and c) steer/wether sale age.
      2. Increase profit and build equity by implementing profitable strategies. For example, across Northern Australia the most profitable strategies for beef producers were consistently:
         a) addressing a phosphorous deficiency where it exists, and
         b) establishing adapted perennial legume-grass pastures to improve steer nutrition.

See the regional reports for more detail and the full range of strategies assessed.

Responding to drought and disasters

• • • all classes of livestock should be assessed for sale; and
    • consider the impact on profit as well as cash flow.

Recovering from drought and disasters

• • • utilise available grazing capacity as it becomes available via the purchase or agistment of stock
    • rebuilding livestock numbers using natural increase alone (retained progeny) will reduce business viability
    • agistment income could be good short term–low risk, and improves cash balances; and
    • restocking through purchasing or trading cattle can be more profitable and therefore better for long-term recovery.

Multimedia

Improving profitability and resilience of grazing businesses

A series of recorded presentations explain and summarise the results and key messages from the project. These include:

1. Evaluating the consequences of alternative management strategies for beef enterprises in northern Australia (presentation to the Australian Association of Animal Sciences)
2. Improving profitability and resilience of livestock enterprises in western and northern Queensland (presentation as part of the E-Beef webinar series)
3. Part 1 – Improving the performance of beef production systems in northern Australia
4. Part 2 – Low cost strategies to build the resilience of beef production systems in northern Australia
5. Part 3 – Improving beef business performance with high quality forages
6. What is the profitability and financial risk of getting into goats?  (presentation delivered as part of the MLA Goat Roadshow)

Assessing options for drought response

Questions that arise when responding to drought include:

• Do I sell, agist, feed or take a chance on rain?
• How are these options compared?
• If I sell, what do I sell first, and why?
• Does my response now decide my recovery strategy when it rains?

These questions have been addressed in a series of seven recorded presentations.  The presentations demonstrate the use of spreadsheet tools to compare options when responding to drought.  The spreadsheets, containing the example figures in the presentations, are also available for download.

The drought response presentations include:

1. Introduction and overview
2. Situation analysis
3. Mortality risk and early weaning
4. Sell, feed or agist PTIC cows
5. Send sale steers on agistment or sell early
6. Assessing forced sales from within cow, heifer and steer groups *EXAMPLE*  Selling extra steers and freeing up space for the PTIC cows
7. Impact of the response strategy on recovery

Assessing options for drought recovery

When recovering from drought the key focus is usually on returning the beef business to its usual cash-flow and profitability as quickly as possible.  This involves identifying the most efficient way of rebuilding the herd structure for optimum profit and resilience.  Although each recovery period is different, the same framework can be applied to assess the relative merit of alternative recovery strategies.  Such strategies can include:

• purchase of cows (and calves) to rebuild the herd faster;
• taking cattle on agistment;
• purchasing groups of steers, heifers or cows and calves as turnover stock;
• re-purchasing the components of the herd that were sold to rebuild numbers to the long-term herd structure; or a combination of all of the above.

In two presentations, we examine these options and demonstrate the use of spreadsheet tools that can be used to compare these strategies.  The spreadsheets, containing the example figures for tactical decision making, are available for download.  The more complex spreadsheets for assessing options over longer time-frames are available on request from the authors.

The drought recovery presentations include:

8. Options for recovery

9. Incorporating climate variability in the analysis of response and recovery strategies

Understanding farm management economics

This recorded presentation explains the methods and terminology used in the farm management economic analyses conducted as part of this project.

The presentation gives an overview of the basic economic principles applied to decision making on beef and sheep grazing properties. The entire presentation is 52 minutes long, however it has been broken down into chapters for people seeking specific information. Visit the Understanding farm management economics page for further information.

Spreadsheet tools

The spreadsheets contain the examples that are discussed in the recorded drought response and recovery presentations.

• Breedcowplus NQ Gulf example herd (Excel macro free)
• Splitsal early weaning weight range (Excel macro free)
• 1 Feed or sell PTIC cows (Excel)
• 2 Agist or sell PTIC cows (Excel)
• 3 Sale steers agistment costs and returns (Excel)
• 4 Cowtrade analysis of PTIC drought feeding costs (Excel macro free)
• 4a Cowtrade keep and feed PTIC cows at $150 and sell steers (Excel macro free)
• 4aa Feed or sell PTIC cows 12 weeks feeding cost calculator (Excel)
• 5 Bullocks Sell steers drought response analysis (keep PTIC cows) (Excel macro free)
• 6 Trading yearling steers as recovery strategy (Excel macro free)
• 7 Cowtrade buy PTIC cows as recovery (Excel macro free)
• M4U feeding (Excel)
• Simple feedlot analysis (Excel)

Case studies and articles

• Central Queensland beef producers are taking advantage of a free service of personalised economic analyses conducted, specific to their business.  This service is provided by the CQ DAF team of beef economists and extension officers.  Contact Matt Brown if you would like the beef team to visit your property; matt.brown@daf.qld.gov.au, or for other areas call 13 25 23.  The story of what one family has gained from utilising this service for their beef operation can be read here.
• Identifying and addressing any phosphorus deficiency is a priority for beef businesses.  The very large economic benefits of phosphorus supplementation, where a deficiency is identified, provides justification for adopting effective supplementation strategies.  More information for economic returns from phosphorus supplementation in central Queensland and the Northern Territory is provided in this article: Improving beef business performance with phosphorus supplementation.

Scientific journal publications

Bowen MK, Chudleigh F, Sallur NM, Sommerfield J (2022) Opportunities to build resilience of beef cattle properties in the mulga lands of south-western Queensland, Australia.  The Rangeland Journal 44, 115-128. doi:  10.1071/RJ21057.  Available at https://www.publish.csiro.au/rj/pdf/RJ21057

Bowen MK, Chudleigh F (2022) Can a return to small ruminants increase profitability and drought resilience in the semiarid rangelands of northern Australia?  Animal Production Science 62, 975-982.  doi:  10.1071/AN21422.  Available at https://www.publish.csiro.au/an/pdf/AN21422

Bowen MK, Chudleigh F (2021) Achieving drought resilience in the grazing lands of northern Australia:  preparing, responding and recovering.  The Rangeland Journal 43, 67-76.  doi: 1071/RJ20058.  Available at https://www.publish.csiro.au/rj/pdf/RJ20058.

Bowen MK, Chudleigh F (2021) An economic framework to evaluate alternative management strategies for beef enterprises in northern Australia.  Animal Production Science 61, 271-281.  doi:  10.1071/AN20125.  Available at https://www.publish.csiro.au/an/pdf/AN20125

Bowen MK, Chudleigh F, Phelps D (2021) Bio-economic evaluation of grazing-management options for beef cattle enterprises during drought episodes in semiarid grasslands of northern Australia.  Animal Production Science 61, 72-83.  doi:  10.1071/AN19691.  Available at https://www.publish.csiro.au/AN/AN19691

Bowen MK, Chudleigh F, Dixon RM, Sullivan MT, Schatz T, Oxley T (2020) The economics of phosphorus supplementation of beef cattle grazing northern Australian rangelands.  Animal Production Science 60, 683-693.  doi: 10.1071/AN19088.  Available at http://www.publish.csiro.au/AN/AN19088

Bowen MK, Chudleigh F (2019) Productivity and profitability of alternative steer growth paths resulting from accessing high quality forage systems in the subtropics of northern Australia:  a modelling approach.  Animal Production Science 59, 1739-1751. Available at https://www.publish.csiro.au/AN/AN18311

Chudleigh F, Bowen M, Holmes B (2019) Farm economic thinking and the genetic improvement of fertility in northern beef herds. In ‘Proceedings of the 63rd Australasian Agricultural and Resource Economics Society (AARES) Annual Conference’. Melbourne, Victoria, Australia. Available at https://ageconsearch.umn.edu/record/285095?ln=en

Bowen MK, Chudleigh F (2018) Grazing pressure, land condition, productivity and profitability of beef cattle grazing buffel grass pastures in the subtropics of Australia:  a modelling approach.  Animal Production Science 58, 1451-1458.  doi: 10.1071/AN17780.  Available at https://www.publish.csiro.au/AN/AN17780

For further information, contact:

Project leader – Dr Maree Bowen, DAF Rockhampton at Maree.Bowen@daf.qld.gov.au