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

The project

Department of Agriculture and Fisheries, Queensland staff are investigating a range of strategies and technologies aimed at making Queensland grazing businesses more profitable and drought resilient.  The project, ‘Delivering integrated production and economic knowledge and skills to improve drought management outcomes for grazing enterprises’ is funded by the Queensland Government’s Drought and Climate Adaptation Program.  Economic analyses are being conducted for a number of regions across Queensland.  A range of management strategies and technologies aimed at making grazing businesses more profitable and drought resilient are being assessed.  In addition, the project is examining options in the drought response and recovery phases. Analyses have been completed for the Fitzroy NRM region of central Queensland, the Northern Gulf NRM region and the Central West Mitchell Grasslands while analyses are underway for the Northern Downs and Mulga Lands regions.

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 livestock production systems – preparing for, responding to and recovering from drought (PDF, 5 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.

Summary messages from the reports:

  • Identifying and addressing any phosphorus deficiency is the first priority
  • Median rates of mortality are critical to business profitability and need to be addressed with ‘whole of property’ strategies
  • Investment in perennial legumes for steer nutrition is a key strategy
  • Target low cost strategies when looking at the performance of the breeder herd in isolation
  • Applying an appropriate framework to decision making and understanding the reasoning behind the process will point roughly which direction to go, not the ‘answer’
  • Partial budgets applied to estimate the expected extra return on extra capital invested is the best way to have a ‘first look’ when a beef production system is already in place
  • All analyses were compiled in the Breedcow and Dynama suite of programs which are available for download at no cost.

Multimedia

More profitable and drought resilient beef businesses

Are you interested in comparing a range of management strategies and technologies that may contribute to building more profitable and resilient beef businesses? This information is available in a series of three recorded webinars that are now available on YouTube.

  1. Part 1 – Improving the performance of beef production systems in northern Australia
  2. Part 2 – Low cost strategies to build the resilience of beef production systems in northern Australia
  3. Part 3 – Improving beef business performance with high quality forages

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

Spreadsheet tools

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

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 is provided in this article: Improving beef business performance with phosphorus supplementation.

Scientific journal publications

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

Bowen MK, Chudleigh F, Dixon RM, Sullivan MT, Schatz T, Oxley T (2019) The economics of phosphorus supplementation of beef cattle grazing northern Australian rangelands. Animal Production Science, Online early. Available at http://www.publish.csiro.au/AN/AN19088

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

For further information, contact:

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

Principal economist – Fred Chudleigh, DAF Toowoomba at Fred.Chudleigh@daf.qld.gov.au