Small changes help sheep producers recover from drought

NSW DPI livestock officer, Geoff Casburn
It’s got to be out there sooner or later, says sheep livestock officer, Geoff Casburn, looking for rain.

Recent analysis of sheep enterprises shows small improvements in enterprise performance can have large impacts on drought recovery.

An improvement of five dollars per dry sheep equivalent (DSE) in gross margin to around $21/DSE approximately doubles the amount of money available for servicing debt, which in some cases almost triples the level of debt the business can handle.

"The above analysis assumes a normal enterprise running 10 dry sheep equivalent per hectare and $100 a hectare in overhead costs," NSW Department of Primary Industries (DPI) livestock officer, Geoff Casburn, said.

"Gross margins for different sheep enterprises vary by around $10 per dry sheep equivalent.

"This indicates there are opportunities for many farmers to make improvements.

"The challenge for many is to identify the changes they can make to achieve the required increase in gross margin."

Mr Casburn, based at Wagga Wagga, says a good place to start is the range of gross margins published on the DPI website to gain a better understanding of how differing sheep enterprises perform.

"You can then use these gross margins as a guide to help you develop your own gross margin for your enterprise," he said.

"Having a better understanding of both your own and other gross margins will help you identify areas to investigate.

"In most cases the greatest improvements in gross margins come from focusing on increasing production or price received for goods, rather than reducing costs."

There are a number of options which may not necessarily involve any extra dollars, for example selecting better rams from less well known bloodlines.

Producers can do this by using tools such as the Bloodline Performance Guide and Australian Sheep Breeding Values (ASBV) for both meat (Lambplan) and wool (Merinoselect).

Other options may include the potential to finish Merino wether lambs instead of selling them as weaners or joining a large proportion of Merino’s to meat rams.

"It is also important to seriously look at stocking rate and assess if you are running to optimum capacity when seasonal conditions improve," Mr Casburn said.

Running high stocking rates requires good soil fertility and depth and animal production systems need to closely match pasture production.

In general for each DSE, approximately one kilogram of Phosphorous needs to be applied annually (this is approximately equivalent to 12kg of single super) to match what is being exported from the farm in wool and meat.

An increase in stocking rate from 10 DSE per hectare to 15 DSE per hectare can have similar benefits to a five dollar increase in gross margin.

To help deal with the difficult circumstances at present, look to the future and identify the areas were possible gains can be made - remember a five dollar increase in gross margin per DSE can make all the difference.