Northern Gulf beef production systems : Preparing for, responding to, and recovering from drought

Abstract

This report details the analysis of the economic implications of management decisions that can be applied to prepare for, respond to, or recover from drought in the Northern Gulf Natural Resource Management (NRM) region of Queensland. Accompanying reports in this series present results for other regions across Queensland's grazing lands. It is intended that the results of these analyses will support the implementation of resilient grazing, herd and business practices necessary in managing seasonal variability. The property-level, regionally-specific herd and business models which we have developed can be used by consultants, advisors and producers to assess both strategic and tactical management decisions for their own properties.
We have applied scenario analysis to examine a range of management strategies and technologies that may contribute to building both more profitable and more drought resilient beef properties in the Northern Gulf region. In doing this, we developed property-level, regionally-specific herd and business models for a representative, constructed beef cattle property which was based on the median herd data from relevant industry surveys and research. The starting base property was 30,000 ha of native pastures on representative land types and was considered to be in ca. B- land condition on average (scale A-D) with a carrying capacity ca. 65% of the safe, long term carrying capacity of these land types when in A condition. The property initially carried ca. 2,500 adult equivalents (AE) with estimated ratio of AE to safe carrying capacity of 1.54 given the B- land condition status. It was assumed that under this sustained stocking rate the land condition would continue to decline at a rate of 0.5% decrease in safe carrying capacity per year over the next 30 years resulting in a decrease in herd performance. The management features of the self-replacing Brahman breeding herd included continuous mating and minimal (inadequate) phosphorus (P) supplementation. The average mortality rate of the base herd was 7.5% and the average weaning rate from all cows mated was 47.4%. The average annual post-weaning weight gain for steers was ca. 86 kg/head. The starting herd size, herd performance and approach to pasture management was assumed to represent the current status of local properties that have largely not adopted a sustainable approach to pasture management.
Production systems that can be applied to improve the profitability and resilience of a beef property to drought are generally of a strategic nature. The Breedcow and Dynama herd budgeting software was used to develop integrated herd models and discounted cash flow budgets for each alternative management strategy. The economic and financial effect of implementing each strategy was assessed by comparison to a base production system for the representative property. Property level productivity and profitability was assessed over a 30-year investment period and incorporated the change in profit and risk generated by alternative operating systems, the changes in unpaid labour, herd structure and capital, and included the implementation phase. Management decisions which are considered in response to, or recovery from, drought tend to need consideration of both short term and long term implications and were examined using herd models in conjunction with spreadsheets designed to assess tactical decisions.