2017 conference presentations
Merino wool versus crossbred wool: A tale of two markets
Chris Wilcox, Poimena Analysis, outlines the relative market drivers for fine wool and crossbred wool with reference to the retail and processing environment.
- [Jason Trompf] So Chris Wilcox, he's a leading economist, an analyst of the world wool market. He has 26 years of experience in analysing the global wool industry, has spoken at over 200 conferences all around the world, has several roles as we speak in the industry. He's the principal at Poimena Analysis and I got that right, I've been practising . Executive Director of the National Council of Wool Selling Brokers of Australia and there's been a bit of innovation on that end of things that you can talk about. Non-Executive Director of the Australian Wool Testing Authority. He's the chairman of the Marketing Intelligence Committee of the International Wool Textile Organisation amongst others. He's formally the Chief Economist of the Woolmark Company which is back in the day when I first met Chris when I was supported through that organisation to do my PhD. So Chris Wilcox, thank you very much.
- [Chris Wilcox] Thank you Jason and thank you everybody for being here. I'm delighted to be here in Bendigo for the Best Wool, Best Lamb Conference, the 10th. Today what I wanna talk to you about, ah tell you a tale about two markets. The Merino wool market and the crossbred wool market. This tale had some triumphs. It has some disappointments. Had some joy. Had some sadness. It's got six chapters as you can see here. I'll go through each chapter. And being an economist, of course this tale has lots of charts and figures and so on so please bear with me. So first chapter one, prices. Let's start at the start and this chart shows a contrast between Merino wool prices and crossbred wool prices. The chart on the right hand side is for Australia. And you can see that Merino wool price, particularly superfine Merino prices in the last 12, 18 months, have gone through the roof and exceeded the peaks we saw back in 2011. 21 micron prices have risen. But 28 micron wool prices are down. But the big declines on crossbred wool are the broader wools out of New Zealand and of the UK. That's the chart on the left had side. You're right hand side, sorry. There's been a 30% drop in those prices. And we had at the International Wool Textile Organization's Congress in Harrogate in the UK, we had representatives from the UK and New Zealand in. And I must say, there's a fair bit of sadness going on in those countries about their wool prices. One thing to keep in mind in terms of those chart to scale. The scale on your right, on your left goes up to 2,200 cents. Scale for New Zealand and the UK only goes to 700 so just keep that in mind. So prices are very different. What this has meant in terms of the price relativities between fine wool, superfine wools and the broader wool, 21s and so on is that we see a significant widening of their price differential. You can see 16 an a half and 18 micron wools there. 57% above 21 micron wool now, 45% for 18 micron and that's well above what we saw back through the 2015 and throughout most of the time from 2015 back through to about 2007. So we've seen that recovery in those price differentials or superfine wools. Part of that story is why are we seeing those rises in the price differentials and I'll about that a little bit later. The other thing is that we're seeing is that superfine wool is outperforming other fibres. You can see there percentage change between May of this year and May of last year. You can see it's up 50% year on year in May. Compare that with other fibres, even cotton. Cotton has risen quite strongly but the broader wools, New Zealand broad wool in particular, massive decline. What this has meant that we're seeing that the price relativity between Merino wool and other fibres has risen. In fact, what we have seen over the last three decades is a steady rise in the average of the price relativity. To me, while this in the past has been a key measure, to me that's no longer a key measure of what's driving Merino wool prices. For crossbred wool, I think it is a driver and that's one of the reason we're seeing a decline in crossbred prices. Now as an aside, we are seeing some differences and I was asked to comment about these trends towards shearing more frequently, six to nine months. So this is a bit of an aside to the tale. And this chart shows what's happened to the price differentials between 90 mil length of Merino wool compared with 50 and 60 mil lengths. So more frequent shearing. You can see that the price differential back in 2012 was sitting at around about 30%. That dropped quite rapidly to about three or 4% for the 50 mil. But more recently, the last 18 months, it's gone back out again to around about a 20% discount between 90 mil, so a full season's worth of shearing versus say a six, seven, eight, nine month shearing. And I'll talk a little bit later about what's driving those discounts. So on to chapter two, production and supply. World wool production has been remarkably stable since around about 2007, 2008. There's been a bit of ups and downs as you can see by the last three years in terms of the 2016, 2017 and 2018 years' production. Lot of that's driven by Australia. Keep in mind that Australia produces about 23% of the world's wool. About 60% of the wool that goes into apparel, 70% of world Merino wool and 85% of the world's superfine Merino wool. So what happens here in Australia in terms of production does have a significant effect on world wool production. But it's been very stable at around about 70 year lows across the world. And for Australia last season's production, 2015, 16 was at the lowest level since 1923, 24. We've seen a bit of recovery this season. Largely because of the fantastic seasonal conditions we saw right across the country for the growing fleece wool. And here's where this tale starts to change. And it starts to explain why there's differences between the prices for Merino wool and the prices for crossbred wool. This chart shows that over the last 7, 8 years there's been a rising gap between the production of wool used in interior textiles had the broader crossbred wool and wool used in apparel. Typically Merino wool plus some other wools. You're seeing that rising gap. And that's because we're seeing right 'round the world, here in Australia we would all well know, but right around the world a shift away from sheep for wool towards sheep for meat. Driven by the demand for protein. You all be well versed in that but we're seeing that impact in terms of the type of wool being produced around the world. And as a result, supply is one of those answers to why were seeing this rise in Merino prices and a decline in crossbred prices with added supply for crossbred and lower supplies for Merino. It's particularly we're seeing that particularly in superfine wool. These two charts show world superfine wool production. In total that's the blue bars on your, better get this right, left and the shares of the total. And you can see the shares are a bit under 6% currently. But in particular, you can see the rise in production around the world from about 2010 right through to about 2014. And that you will see is driven by the rise in production of superfine wool, 18.5 microns and finer in Australia. But in the last two or three years we have seen that come back. So we've seen that production drop. So that's helped support the prices for superfine wool because, as I'll talk about a bit later, I'm absolutely convinced there's been a strong rise in demand throughout the last decade for superfine wool. But this rise in production that we saw in the back half of the 2000s and into the 2010s in Australia swamped the rising demand and that's why we saw the price differentials narrow so sharply. We're now seeing that rebalancing. Back to the sideline story of prem shorn wool. This chart shows the increase or change in production both in terms of total and in terms of the share of prem shorn wool. It's actually auction data and data from AWEX showing the prem shorn wool. And you can see the sharp rise since around about spring 2015. We're up to around about a bit under 12% is now that prem shorn wool rather than a full season shorn wool. About 2015 it started rising. And remember this chart how we saw at around about mid-2015 was when the discounts were the lowest. They started widening out. So supply is one reason we've seen, and probably the main reason, we're seeing the discount starting to widen again. Now you might think well what's this wool used in. I've asked a couple of my friends in the spinning industry. So one friend in a company called Sha-nel. Sha-nel is the biggest Chinese owned wool spinner. It produces mainly knitting yarn. I asked him the question, he tells me that in his view, there's no reason why the market can't absorb this added supply. Because it gets used in particularly knitting yarn for flatbed knitting. So you're standard knitwear jumpers rather than circular knit. Circular knit needs a bit longer wools but for flatbed knitting, for normal jumpers it can easily be used in that kind of market and there's a big market for that. And that's been doing very well in the last fiver, 10 years. But I suspect what we're seeing is just buyers trying to be able to put these shorter wools into batches, shipments for processing and just trying to do that rebalancing. So that's chapter two production. What about on the demand side? What's happening on the demand side around the world? Let's first look at raw wool demand, chapter three. Well again we're seeing a tale of growth for exports from the countries that typically produce Merino wools. Australia, Argentina, South Africa, particularly Australia. This is in volume terms, keep in mind. And you can see that the exports from those three countries are the steady or growing, notably from Australia. But exports from New Zealand produces mainly crossbred wool. Only 6% of the New Zealand wool clip is Merino. The rest of it is fine or broad crossbred wool. And you can see the massive drop in exports from New Zealand. You can also see the massive drop in exports from Uruguay. Uruguay's mainly produces Corriedale wool with a little bit of Merino wool. So again, this is part of the story. This is what's driving the differential between Merino wools and crossbred wool. And for Australia, this is by micron category both in terms of volume and value and you can see the growth in exports of 19 micron or finer and 21 to 23 micron wools. But at the same time the drop in exports of those broader crossbred types. What we're seeing is, particularly China, now you'd all be aware that China from Australia takes 70 to 75% of Australia's wool. It takes 60% of New Zealand's wool. Takes around about 65% of Uruguay's wool. Takes a significant portion of the UK's exports and a significant portion of the South African and Argentina's exports. China's what's driving this trend. And this chart shows what's happening with china's imports. As you can see that it's imports from Australia and South Africa are on a rising trend year on year. In contrast, its imports from New Zealand and Uruguay and others and others includes the UK are on a steady decline. China's mills do not want crossbred wool at the moment. They want Merino wool that's what they're buying. And I'll get to why they're doing that shortly. Chapter four, wool textile industry conditions. Now I mentioned that the International Wool Textile Organisation had its annual congress in the UK in May. And in the lead up to the congress every year, the market intelligence committee does a survey of countries around the world asking for feedback about what the wool textile industry in each country is doing. It's not about hard and fast numbers, it's about sentiment, how do you feel things are going. And we ask questions about activity levels in different sectors. We ask about stock levels in different sectors. And the next chart, I must warn you before I begin, is a bit of a spaghetti chart so please bear with me. This chart shows production activity levels in each sector. And it's judged according to how they feel activity levels are whether they're very good, or whether they're good or normal or poor or very poor. So a scale of one to five. And you can see variety of lines but the point is that for the most recent period so for the March 2016 and then looking forward to March 2017 and looking forward to the end of 2017 conditions are generally pretty good. Generally pretty good. Good in the early stage processing sector, good in the knitting sector, in the weaving sectors improving. Then knitting doing very well. Remember I talked about knitting. It's doing very well. Interior textiles though not all that good. So it gives you a bit of hint the way that things are feeling. I talked about the raw wool demand and the crossbred wool not being bought. It's the interior textile sector is struggling a bit at the moment. The other thing that came out of the survey results is we ask about stocks and stocks held at eight sector through the chain. Early stage processing, spinning, weaving, garment making. And we asked about how the stock levels were and in general there was a response saying that they were under control. In interior textiles, perhaps a little bit high but I'll get back that a little bit later when I talk about all the results coming ahead out of the International Wool Textile Organization's annual congress. So in terms of textile industry conditions mills around the world are feeling reasonably confident which is good news. Chapter five, the consumer. Well this part of the tale is very mix. There's some good things, there are some not so good things. First of all, consumer confidence around the world. It's rising or at levels we haven't seen for many years. This shows consumer confidence in the US, in the EU, in Korea, in China and in Japan. And you can see the blue line, the US, that's at levels we haven't seen since 2001. Remarkably, the US consumer is at tremendously confident at the moment. In the EU, similarly, we're seeing levels we haven't seen since before the global financial crisis in 2008, 2009. It's a bit more mixed in Asia. Quite good in Japan, rebound in South Korea. Although I was talking to David Michaux from Michaux's last week, he's only just recently been in Korea and he said consumer confidence in South Korea is just gone through the floor in the last month or so because of the problems with North Korea. So he said there is some concerns there in Korea. By the way, I should have said there countries collectively US, European Union, China, Japan, Korea account for about 65% of the world's consumption of wool at retail. As garments, as carpets, as upholstery fabrics, as curtains. So about 60, 65%. So this matters. so consumer confidence, very good. But US imports of clothing has declined. Regardless of fibre, its declined. So consumers are very confident but the importers of clothing into the US, say for the retailers, aren't all that confident about being able to sell those products. What about the longer term? Before we talk about the longer term, lets just have a look at a picture about where does wool go around the world and doubt is the only thing we've got to be able to measure where the consumption is really. And you can see that knitwear accounts for a significant portion of the world trade. Men's suits, men's overcoats, men's trousers and jackets also a big portion. Women's overcoats are important. Other women's low. We've actually lost a huge share in womenswear over the last 20 years, huge share. We're just not competing. In terms of growth opportunities for wool, particularly Merino wool, where I see the growth opportunities are in knitwear, both in terms of traditional knitwear but also in terms of next to skin wear, the active wear. The kind of product you saw last night at the end of the fashion show. Strong growth. It's only small market but it's a strong growth and they're fantastic products. I wear it when I run. I wear it when I cycle. Just fantastic. And more and more people are finding that. The mainstay menswear will continue to be a mainstay as will women's coats. But there'll be decline in womenswear generally. In terms of the IWTO Congress results, let me just talk a bit about some of the feedback that came out of that. And there's quite a bit of information on here. There's some positives and some negatives. On the Merino side, it was generally very positive but for crossbred wool there was concerns about whether crossbred wool had lost markets to other fibres, notably acrylic in the heavier women's coats, in particular in China. There's also been an issue about double faced wool and fabric. There was a absolute craze throughout 2015 and into 2016 in China. It was massive and stupid and there was way too much stock of the product built up. And they're still trying to sell. The wool that was use in that often was crossbred wool. One thing I was asked to make a comment on is about mulesing. And there was at the IWTO Congress mulesing is clearly a negative. And when I talk to mills around the world, even in China, they say they're getting increasing demand for wool that has been from sheep that is non-mulesed. They don't know anything about pain relief. They want non-mulesed. The retailers and the brands, they want non-mulesed wool. Now we have seen an increase in non-mulesed wool production here in Australia. Well it's up to about 9% now. 9% that's all. So these mills are turning to South Africa, Argentina and New Zealand. And keep in mind New Zealand's only got 6% of it's total clip is Merino. And Australia is 70% of the world Merino clip. If they want non-mulesed wool they've gotta find it from somewhere and unfortunately here in Australia it's difficult to do. As I said they don't know about pain relief and every time I go to the mills in China they're talking about it. Not for the Chinese domestic market, it's for the export market and about half of the wool that goes into China is re-exported into US and the European Union in particular. One thing I want to finish on is the Dumfries House Declaration which was discussed and announced at the IWTO Congress. Prince Charles who's the patron of the campaign for wool hosted the Dumfries House Wool Conference last September. There was a declaration made amongst all those 200 people. It's a 10 point declaration. The president of the International Wool Textile Organisation Peter Ackroyd is seeking signatories to that. And the 10 points of the declaration are listed here. I won't go through them here but I urge you if you're involved in the wool industry, Merino wool, crossbred, to sign this declaration online. Google search Dumfries House Declaration and you can sign it on behalf of your businesses. It's important because it makes some key points about wool in terms of its sustainability. In terms of its recycling and so on. And because, make no doubt, have no doubt there's challenge for wool on sustainability from all other fibres, even synthetic fibres who are promoting the recycling use of synthetic fibres even though they're more and more problems with synthetic fibres. So please I urge you to sign that declaration. So it's an unfinished tale. This tale. We've got some answers but it's still going. And I think that we'll see crossbred wool prices over the next few months start to lift because nothing solves low prices like low prices. We'll see an increase demand in response to these lower prices. I have no doubt. There is wool that's being built up in sheds in New Zealand that will need to be flushed out first but never the less I think we'll see an improvement in crossbred prices. Although there are some concerns about whether we've lost some markets in crossbred wool. For Merino, we're seeing a strong increase in demand. Particularly for that lighter weight, next to skin wear but we've had these very high prices and we've seen cycles in the past. So I would not be surprised to see those Merino prices start to come off in the next few months particularly when we see the spring flush of wool come on to the market. To be continued, thank you very much.
- [Jason] Thank you very much Chris and we do have time for some questions. We do have some people with roving mics I hope they're about. If you've got a hand that's up near you before kill all the time we do have a couple right up the front. Yep, we have one from Terry and then we'll come across whichever order. Yep.
- [Terry] Thanks Chris. Just with the mulesed wool and non-mulesed, do you have any comment on where Australia's in terms of world shape? In terms of mulesing so are we the last country that mules sheep or where do we stand in that regard?
- [Chris] It's claimed that Australia's the only country that mules sheep. South Africa claim they don't mules and New Zealand claim they don't mules and South America claim they don't mules. So it's an Australian problem on that basis. Not only do they claim but that's what they recognise. When you speak to the mills, they say oh no South Africa don't mules or New Zealand don't mules. So it's very much an Australian problem. Sorry.
- [Audience] But it's an ingrained perception.
- [Chris] Yeah, that's right. And I said, they want mulesed, they don't know anything about pain relief. Even though we're seeing a big increase in use of pain relief here in Australia.
- [Jason] So we're keep moving. We'll get through a few. Terry.
- [Terry] With the growth in prime land production, particularly composite based, do we have a crossbred wool quality issue more so than an over production? In that, have we lost markets because of the quality of the wool coming off composites rather than the wool coming off a Corriedale or a?
- [Chris] Well can I say I'm an economist not a wool classer. I did wool classing, as you know Terry, 30 years ago but I don't think so. Because it's not an Australian demand problem. It's New Zealand and UK and Uruguay. If in fact more so than here in Australia. I don't think it's a quality issue at the macro level.
- [Jason] Linden.
- [Linden] Chris you mentioned in the Dumfries agreement that you're signing to be, your wool will be welfare assured. Can you just elaborate on that a little bit?
- [Chris] Yes. There's actually the International Wool Textile Organisation has a animal welfare statement that's been signed off by all countries including Australia. And it's about the five freedoms to do with sheep. I can't remember the five freedoms but it's essentially no cruelty, adequate supply of water and so on. But it's listed on the IWTO website. It's not about non-mulesed versus mulesed if that's we're you're going. But it's about the fair treatment of animals.
- [Jason] Okay, yep.
- [Audience Member] I'm just curious how susceptible is the Merino industry to oversupply again given that there was only subtle changes have had a big impact currently?
- [Chris] I don't think it's subject to oversupply. We saw with superfine wool the supply increased, the rapid supply increased we saw on the back of the result of the impact of breeding decisions made 10 years before and the dry conditions we back in the 2000s. That swamped the increase in demand but one shot I haven't shown in the increase in demand we're seeing in terms of export value. It's been so strong consistently since 1991. Ups and downs as we go but I don't think we'll have a problem with oversupply. In fact at the moment I think if anything, we got an under-supply situation which is not bad for prices.
- [Jason] Linden.
- [Linden] In regards to mulesing, what is the benefit dollar wise of in cost wise?
- [Chris] Yeah, there's only been one study done that's reported on the AWI website Elizabeth Nolen did this study. It's a econometric study. She came up with about two or three since but talking to buyers and there are some buyers such as Reda of Italy who've got a sustainable programme. New England Wool is linked to that. They pay significantly higher premiums for non-mulesed wool but there's a number of other issues that you need to address. While the overall market suggests couple of cents, two or three cents depending on the microns, there are some key market segments or programmes that get significantly higher value.
- [Jason] Okay.
- [Audience Member] Chris, you let on little bit there before about supply and so forth of it. We're starting to see deteriorating weather conditions right across the country in the western Australia, Queensland, New South Wales and parts of Victoria. What would happen if we went into a drought with supply and what would the processors reaction be?
- [Chris] Well there'll be two impacts. One as you know there will be a bit more hunger but more importantly there'll be a presumably because we have seen the increase these days because of fleece whites. Fleece whites dropped back. I don't see we're seeing any increase at all in sheep numbers in Australia so we're drop back in production and they'll be concerned about that, no doubt. They're concerned about already about supply out of Australia. When you think about those numbers about 23% of world wool production, 60% of world apparel wool, 70% of world Merino wool, 85% of world superfine wool. They have to be worried about what happens. I do a presentation at the Nanjing Wool Conference every year and the Chinese always want to know what's happening to production in Australia.
- [Jason] Last one.
- [Audience Member] Chris if the processors and buyers are let's say not aware of pain relief and therefore perhaps not the national wool declarations, is there any value to give the industry a bit of breathing space of promoting or promoting global awareness of the national wool declaration and the pain relief?
- [Chris] I think there is value in that but how you do that's a question. And keep in mind that these demands are coming from the retail side. The retail side and the brand companies and the people who work for those companies know about non-mulesing, know about mulesing. They don't know anything else about it and you've got a significant education programme and will take a fair bit of effort and in my view I think it's worth it but it's a significant. And wool producers in Australia are well aware of some of these issues.
- [Jason] Alright. If would could give a big round of applause for Chris.
- [Chris] Thank you.
- [Narrator] Authorised by Victorian Government 1 Treasury Place, Melbourne.
Putting the pieces together at Jigsaw Farms
Mark Wootton, Jigsaw Farms, discusses the approach at Jigsaw farms to their business objectives; production; risk management including climate and supply chain management.
Putting the pieces together at Jigsaw Farms
Increasing the margins from lamb finishing
James Male, farmer and Nuffield Scholar, outlines how he runs the lamb finishing enterprise on their farm including key learnings of what works and doesn't such as rations; animal genetics and cost structure.
- [James Male] Thanks for coming in today. Just a quick, who finishes lambs with grain at the moment, is there many that are doing it? So there's a few in here, so yep, just good to know. Right, I'll be straight up, I'm pretty uncomfortable doing this, I'm just a farmer, I'm more at home being on the farm, and I haven't done lots of scientific research, nearly all of ours is anecdotal, what we know works, trial and error, we've learned by killing lambs, I reckon that's what's happened. Anyway, what I'll do is I'll give you a quick overview. We're between Wagga and Albury, so it's real undulating country, mostly cropping country actually, so we put a lot of crop in. Most of their crops are grazing crops, sort of grazing wheats, grazing oats, and we just started with grazing canolas, as well. The farm overview, I work in partnership with my wife Geraldine and my brother Greg and his wife. Our home base at Yerong Creek. We got 2,400 hectares at Urana that we share-farm, as well. All up, there's nearly six and a half to 7,000 hectares of country that we own, share-farm, manage, and lease, so it's a very dynamic setup that we've got. We crop about 5,200 hectares of wheat, canola, barley, oats, and lupins. 23-inch rainfall where we are, and it's back to 18 inches at Urana. We run about three and a half to 4,000 breeding ewes and we turn off 25,000 lambs annually from the feedlot and grazing crops. I'm just gonna really specialise in the feedlot today. Why a feedlot, well we got into it, we did it tough during the droughts, we were predominantly all cropping, we ran a few sheep, but it just, the balance wasn't there. We just got hammered, and we thought, gees, we gotta do something different. We'd get bad quality grain that we'd get flogged with, and so we just thought, well we gotta do something. And we thought, let's figure out our grain. We'd had experience feedlotting cattle on a real small scale previously, and we just thought sheep, it just fitted our enterprise mix a bit better. So it allowed us to put more crop in, or run more ewes. We wanted to value add our downgraded grain, we could utilise the straw that we've got standing in the stables, pretty low set-up cost, and we're in a good area for it. Good access to markets, processes, feed sources, and water. So I'll just run through a couple of quick photos of the feedlot, this is only taken probably two or three weeks ago, we've sort of cleaned a lot out now, this is our, we're just selling flat out, we're probably getting rid of, probably between 1,500 and 2,000 a week at the moment, and then we'll be cleaned right out by the end of July. And so that's it there, we just got all sort of set up there, it was all, we just put it all up ourselves basically with a bit of help from, a bit design with Nick. When we first started in 2012, we just had a simple setup with self-feeders in small paddocks. We planted trees between there, so they're all providing shade now. We had the yards were made, we sort of needed a new set of yards at that farm anyway, and now we've just got a shed over the whole complex and sheep handling facility and everything. But that was in 2012, that's when we used the self-feeders. And then I started value adding grain, that was barley we had in 2012, we had 2,000 tonnes of it, which was just crap, we couldn't even sell it. We were offered 60 bucks a tonne for it, it weighed as buggery, but I had it tested, and the protein and the energy, I can't remember exactly, but it was something like 10 megs of energy, and sort of around 10 percent protein, as well, and I thought, well, can we use it to feed? I got it tested, it was a bit too much, there was a bit of, it started to go off a little bit, sort of thing like it stunk, but they said it would be fine, provided you mix it in with some other grain, so we just started mixing it in with some decent barley, some lupins, and we had some pellets that we were putting in as a buffer, and that was the eye-opener for me. It was like we turned that grain from 60 dollars a tonne into 300 dollar a tonne grain, and I thought, gees, this is what we want to do. We don't want to be just ripped off as cropping farmers, just take being price taggers, if we can convert it into something, yeah, it's really good. So that's our setup now. We went away from self-feeders into a line feeding system. The only way you can do that is with pretty big numbers, it's a lot more intensive because you need someone there all the time, but we can do a cheaper ration, and we had the mixer, and we don't run into troubles with acidosis because when we start them they're on a really light mix, and then we can just heat it up. We got four different rations, the starter one, the second, third, and their finishing ration. The great thing about, we haven't lost a lamb with acidosis since we've had this system. So that's, looking back down, I said at the last session it is my happy place. I just go up here on the motorbike, sit in that spot, tell the dog to shut up, turn the motorbike off, and listening to lambs eat, they're crunching away, it's just music to my ears. And my wife reckons I've got a few little issues, but she just doesn't quite understand. I just love it. When they're all looking good, and they're all got their heads through, it's a real satisfaction thing for me, I just really enjoy it. So that's just the ration there. That's the finish ration, you can see there's not a lot of hay in there at all. And then that's our sheep handling. Weighing is just massively important for us, we weigh everything, and nearly 80 percent of ours normally go to Woolworth's so they're pretty strict on their specs. I say that pretty loosely, we've had a lot that we've ground right out, because the export jobs have been good. That's just a mixer, we put hay in there, at about 10 percent, I've got the ration later on anyway, I'll show you our finishing ration. And then it's just barley. lupins, and we use an additive, that's the only thing we buy in, everything else we produce on the farm, and so as I said, we can produce it really quick, or really cheaply, but if we had to buy it all in, you lose a lot with transport costs and handling, you don't know what you've got as well, so it's value adding your own product. I did a Nuffield scholarship in 2012, it's probably the best thing I've ever done, like just for the farm and my own, you got some really interesting people you meet along the way, and I was looking at lamb feedlots. The main findings were there's nothing, no rocket science, lamb's a niche product always will be. Do a cost analysis when you grain finish lambs. There's massive variabilities with feed conversion efficiency in lambs, if we could work out a gene that you knew exactly what lambs were gonna convert well, and what wasn't, then that'd be great. Feedlot lambs are more efficient with self-feeders than on a total mixed ration. So self-feeders are actually still more efficient, the only problem I find with them is I can do the ration cheaper with my total mixed ration, and plus I don't run the risk of acidosis. Because you're combining your straw, and your cereal hay, and your roughage in as you're going. Feed them whole grain, don't have to roll it, you don't have to ground it or anything like that, so that's the beauty of 'em, as well, they're great converters, they're really good at converting. And then just getting everything right, the little things right, your protein, energy, and your vitamin, mineral requirements, and just getting that 10 to 11 megs and 14 to 16 of protein is pretty well in the sweet spot. So I've just got tips for success. They've just asked me to provide what my tips for success. I've just got prior to starting, and once you've got lambs in, and those are just ones I was sort of thinking of. Just weigh up with your breeder or finisher. I know a lot of people in Victoria, they're a grass-based system, and if they were to set up a feedlot, they'd be buying in the produce, and I don't reckon the cost would work out too well for them and so they might be actually better off concentrating on breeding big numbers, getting 'em up to 35-45 kilos or 30-40 kilos, and then selling, there's a big market for store lambs now as there's more specialised finishers, specialised breeders, and so you've just gotta weigh it up. Some years you'll be able to finish them off, other years sell 'em as stores. Knowing your cost is just crucial. Just do your research before starting a feedlot. I know you can do, just get some self-feeders and throw them in and in paddocks, and a lot of people do that really effectively. But if you want to go on a bigger scale, just know that there's headaches involved, like anything. Extra labour, don't skimp on infrastructure and technology. Decide on which system works best for you. I've got one I missed there, dealing with dust, dealing with mud. Once you get big numbers through, sheep becomes, like last year, it was that wet, it was horrible. Everywhere you went, the lambs didn't do much good, they had mud under their bellies, it was just, you know, whereas this year, everyone's whinging about not having any rain, I'm just going, you beauty, it's fantastic for us at the moment, they've just been flying the feedlot, but an inch of rain would be perfect for us now, though. Yeah, decide which system works best for you, whether it's self-feeders or a line feeding. When trading lambs, you've gotta use forward contracts. Just too risky, if you're punting the market, you might as well, yeah you could punt anything, who knows. Like I don't think anyone picked this year, what prices were going to do in February when they went through the roof. Find and use a top agent, we use an agent, and I've got no problems forking out money for an agent, he makes an absolute killing off us, but while ever he's making money for us, we got no worries. He's sort of a good mate and if he can buy lambs in for me that he knows are gonna do really well, I'll have a truckload of lambs he'll say are on the way, that I've known nothing about, you know what I mean. So that's the relationship we got, he goes, oh, I've got some lambs that are coming down from wherever, or up from Hamilton, do you want 'em? And he's pretty spot on. Focus on dollars of feed cost per kilogram live weight. Really important there, know your feed costs, I think, and so don't just focus on, gees, they're converting really well, if your feed cost might be, you know you can get this ewe pellets that you might be able to buy, but they might be 550 bucks a tonne or 600 dollars a tonne, whereas our ration at the moment's 238 dollars a tonne, so I don't care if their feed conversion's not quite as good, because it's still cheaper in the long run to get them to that target weight. Value adding your own feed if you've got it, that's still your best bet rather than buying in. And don't assume it'll just make a quick buck, it's like anything, it's ongoing. So once you're started, these are the things that I've found works for us. We can't always do it, but they're very important things. When you start, have them in small mobs of similar weight range. So you don't want a 50- kilo lamb with a 30-kilo lamb, they'll just bully them out and stuff like that. I had a question last thing about keeping mobs together, and there's a really good one. We find that when lambs come in, like if I buy a mob off Auctions Plus from vendor-bred lambs that have been really well looked after, they've been weaned, I hardly get any shy feeders, they're with their own group. Whereas if I buy a mob out of the sow yards, I might have 20 different vendors, they could have been in the sow yards for two or three days without much feed or water, and then, even though they might weigh more, that takes them longer to adjust and they're more shy feeders. Keeping those groups together, they're a real social animal, and I try and keep the same groups together from when they go in the feedlot to when I start selling them. So I don't bring them back in and weigh them into different weights and stuff like that, just put them in their weight ranges to start with, take them right through, and then worry about it. Like I used to bring them in on a weekly basis, and try and then sort their weights, I was creating more work, and they weren't doing as well. So let them, just let them settle. Just once I pull out the shy feeders after seven to 10 days, just bring them in once, give 'em a quick overview, make sure they're right, anything that's not eating, take off, put them back, and then I don't touch them for four, five, six weeks, whenever they're ready to start coming through. Be patient when inducting the lambs, there are no shortcuts, just we weigh, drench, vaccinate every single lamb. It's just crucial, we're in the business of putting on weight, so we gotta do it right. Remove the shy feeders. We do get deaths of course like it's just one and a half percent die, deaths are not normally from exotic causes. They're usually a combination of factors, and it's unavoidable, but gees, we've brought our death rates from three percent back to one and a half, and we've sort of now plateaued at that level, it seems to be that if we get back to one percent, it would be really good. Observation's a massive key. React quickly to problems, if there is something happening, get onto it straight away, because it will multiply real quick, even within
24 hours. If you reckon there's three or four dead ones, gees, something's not right, do something about it straight away, we've really been stung. Clean, cool water, feed test all your feed. Just don't assume that, that's what I said, Nick and I we got called out during a trial, lambs, they just weren't putting on much weight, and I said, oh, it's not all the grain, and he said, have you feed tested it? And I said, no, but I know it's the protein's 11 percent, we got a feed test, we were miles off, and so once we fixed that up, it was a good lesson for me. Whenever I get grain in, even our own grain, I know what the energy and the protein is. Because you work on pretty tight margins, that's all, so you just gotta make sure you do it all right. Be specific in the market you're targeting. And get your skin length right, we reckon between 60 and 100 days, like I hate sending lambs in with a too short of skin, and only getting two bucks for a skin when I could have just held on for another three weeks and gotten seven or eight dollars, that can sometimes be more profit, that extra five bucks. And we try to get rid of 'em before 100 days post-shearing so I don't have to go in, bung-hole all the lambs, I just hate, so it's another job, another cost, when you're doing thousands, it's hard to get. I hate doing it, and the blokes that work for us hate it, too, but anyway. Ideal lamb for a feedlot. This is just my, everyone's got their own opinions, this is just mine. I'm not real fussy, ones that return a profit. I don't care if it's a, whatever it is, if I buy it cheap enough and can sell it, and it's what I want. But as far as the ones that do the best, anything joined to a terminal sire has proven year in, year out, the best for me, and that's been a Poll Dorset or a White Suffolk. More and more comps that's coming through, I bought a lot of lambs out of Hamilton last year, and they did really, really well, I've gotta say. They haven't always been consistent, that's probably the only key thing that I've found there. We've had some that have done really well, some have been a bit disappointing, but yeah, the Poll Dorsets have been really good, but I think it's because we get really good genetic, Poll Dorset genetics, just where I am, and my brother's got a Poll Dorset stud, so I've got to plug him, as well. But I think there's a big thing to do with environment, as well, like our own bred ones, they're used to, they know that we go around with motorbikes and dogs, whereas some people might, some sheep mightn't be used to it. They're used to the temperature, the feed that we've got. I bring them in from Dubbo or from wherever, they can be really different animals, and can take 'em a lot of time, or ones from down south here that take time to adjust to our climate, and everything like that. I don't know if there's any research done, but I just know locally bred ones do better, and it's probably a combination of stress and environment, that's what I put it down to. And I'll just go through a couple of quick photos, actually I'll go quickly to our costing schedule. You can see the ration up here. This is sort of my finish ration, 57 percent barley, 25 percent lupins, 10 percent hay, and eight percent, it's a base, it's got your Bovatech and vitamins A and E, and it also acts to take the dust of it and stuff like that. And I just basically nearly every mob of lambs that I bring in, I just work out what my value is when I get 'em, I know exactly what their weight is, their entry live weight, and then I know exactly what weight gain they're gonna put on, they're gonna be putting on 300 grams per day at five to one, some are gonna do better, some aren't going to do as well. They'll eat one and a half kilos of grain, of our mix per day, and so that's the ration cost based on those prices. Now that varies a hell of a lot, like barley was 130 bucks a tonne, so I just put in the price, what I'd get if I just sold our grain on the open market, and that's what I'd be able to get at the moment. So at the moment, it's costing me 228 bucks a tonne for our ration, which is 34 cents a day per lamb. They're putting on 250 to 300 grams per day, which is $20.55 per lamb for 60 days. And so, if I bought a 40-kilo store lamb for 130 bucks, I count one week of feeding, an induction week without weight gain, it's just let's get him settled, we'll give him a week before I start really counting it, and then it's another $20.55 for the feed cost, drench, vaccine, deaths I count for one and a half percent, shy feeders, labour, and machinery, you could probably bump that down, like that's varying everything pretty highly. Cartage both ways, that can be more or less, but averages out about six bucks. Commissions, that can be negotiated when you're trading. Your levies, your interest, whenever we buy lambs, it's pretty well borrowed money, and so it's a factor. So that 130, that's 50 dollars of cost over 60 days, and then this is the thing, I'll get them to 27.26 kilos at $6.60, which is what I'd be able to get at the moment, so that's 172, plus a $7 skin, $186.92 against my $180.78, $6.14, I'd have a crack at that. You know, it's not a lot, but I'd still be happy to go with that mostly because we got a better price with commission, our transport, we got our own truck, we do our own transporting, so to keep the wheels turning on the truck's important. I've already got labour, everything set up, so I'd probably be able to get that up to 10 bucks. So if I can buy a 40-kilo lamb right now for 130 bucks, or what date are we up to, June, July, no, I wouldn't do it now, because there's no contracts in two months time, you know what I mean? So like I wouldn't be able to get $6.60 in another 60 days. We talk with Woolworth's every week, what can you give me in two months from now, what can you give me, and we've got contracts 'til the end of August, but then she's no show, because I can just buy 'em out of the sow yards, a dime a dozen, so we just go from December through 'til August, and then we just shut up shop. We haven't bought a lamb now for a couple of months, so I might be off the market, I'm not even following it just right now to buy in, because we closed down. Anyway, any questions there? Yeah, well there's definitely, our dressing at the moment, and I still reckon different abattoirs will give it different results. They say it won't, I guarantee, I've got lambs getting killed at Junee, at the moment they're coming back 50 percent, week in, week out, it's unbelievable. I sent ones to, identical lambs, they're coming out at 49 percent. I send 'em to other places, they're 48, 47 percent. This time of year for us, they're yielding unbelievably. If they've been on the feedlot for more than six weeks, we find that the yield is cherry. If they've only been on for a short period of time, they're down to your 46s and stuff like that, but once they're in that right now, a lot of them have been on for over 60 days, they're yielding like unbelievable. Honestly, I don't do a lot of Merinos through the feedlot. I have done, but I can't sell 'em to Woolworth's and most of ours are going to Woolworth's. They're definitely not yielded, the ones that I have done, I can't remember exactly, but it would've been years, I reckon. 45 to 46 might've been, so yeah. Yeah, look, I like to shear all of our own, but we lamb in August, generally. We sort of, by the time we get to December, we're flat-out harvesting, so we're still predominantly cropping. Straight out of the harvest, we start shearing first week of January. I shear all the lambs, I don't try and get any out pre-shearing, it's just not gonna happen, we're just too busy. And I'll tell you something, you gotta work in your system. As soon as they're shorn, I induct them straight into the feedlot. And that's I like to have them shorn going into the feedlot. If they're not shorn, like I'll buy woolly lambs and shear them, and then put them in, or buy them already been shorn. Ideally, if I could buy the perfect lamb, it'd be a second cross lamb that's been shorn, drenched, vaccinated, and been trial fed grain for three weeks prior, I'd be laughing. Yeah, absolutely we just say April is our happy mouth for lambs in the feedlot. Like it's not too hot, not too cold. You can just see they're loving it. So we call that our natural lamb feedlotting month because it's a dry month for us. When it gets wet, they go off the feed, they just stop eating, they just don't feel like it, so last year was horrendous, it was the toughest we had, because it was just day after day of drizzly rain. It doesn't matter if we get a big downpour and clears out, it's just the constant days of wet weather. And then when it gets really, really hot, the other extreme, yeah, they'll go off their tucker as well and we find there's a few more deaths, as well, so it does affect, and so, look, I've talked about designing a new feedlot, an ideal feedlot, I reckon I'd have an under-shed, where I could just drive that feed cart right down the middle, so they're all under cover, but then they've got access to outside, as well, so you know what I mean? So the feed's always dry, they've got a big, dry area, but it's not gonna happen because it'd be too costly. But that would be ideal, I think. You can see that was in summer, not a lot of feed around the pens, and just being able to have them confined, and putting on a pair of weight, it's just really good. So that's it, up to six litres of water, a kilo and a half of feed per day, that's just a mixer. I'll just share, these are a few photos of when I was in America at a feedlot. It had 45,000 head, like it was just a real eye-opener, and it was freezing, it was absolutely freezing, but they're only in nine-inch rainfall, there was no mud, it was compacted ice that I was standing on, and that's where I got the idea, too, it's a pretty simple setup. I still reckon if we had a setup like that, every lamb would be out in the laneway, I don't know. They just had no environmental problems, that was a real busy highway along there, and yet, it didn't worry them. That was 100,000 head feedlot. Mind blowing, absolutely mind blowing. The ugliest looking sheep you'd ever see, but in America they draw 'em out to 50 kilos carcass weight, no worries at all. You see, that's a 110-pound, that one hanging up there. We thought we were in bloody cattle labs watching vealers getting, And then, that was in France. They're putting on one month of age, they were going into a feedlot, a milk breed. And then this bloke here in Idaho, it's 7,000 ewes, every one of 'em brought inside for lambing, and then they'd just basically feed, they'd all end up on a feedlot. This was in 2012, it was averaged $310 for his lambs. Look at the rangy looking things, and they're about to get shipped up into those range lands. And then that's the lambing stall, so they'd bring them in and every ewe, and do that. But they had cheap labour.
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Which ewe enterprise
Kieran Ransom, (consultant) and John WebbWare, (Mackinnon Project) discuss the results of the Elmore ewe trial that compared a number of ewe enterprises for wool and lamb profitability and modelled over a range of Victorian locations.
- [Kieran Ransom] Lisa Warn who was in the previous session, she's done a lot of this type of background work on profitability estimation, and same as John WebbWare with a vast experience in other parts of the state that I lack. The three of us have been analysing the Elmore's data. And so the Ewes for the Future, Lambs, Wool, and Profit, this is our first trial. We're now into our second trial at Elmore. And in my retirement, I'm a volunteer with the Elmore running this trial like everyone else. So that's the Elmore Lamb Group that do a lot of the work in the trial, and certainly the Elmore Field Day staff keep an eye on the sheep during lambing on an everyday basis. And so it's The Campaspe Lamb Producers Group. So the first part of it is overview of the ewe trial results. Then how we did the economic analysis. Then the financial results, and we're forgetting about that part today because there's basically no time. So the ewe trial, 210 ewes, five breeds, 42 ewes per breed. And each breed came from three properties, and 14 ewes per property. So this was to make it statistically valid for people to log these sorts of things. So they were crossbreeding ewes from SuperBorder rams, a subgroup within the Border Leicester breed society. Merinos, Peppin type from local studs, local merinos, and three dual purpose types: Centre Plus merinos, Dohnes, and SAMMs. Centre Plus, we got pretty good breeding. ASBVs for all these dual purpose characters. And Dohne and SAMMs, there's certainly a lot of interest in those, especially when we started. And they're all in the district as well. So the key measurements that we were looking at were lambing percentage, lamb growth, wool weight and fibre diameter, and the mature weights of the ewes. So the main interest, I suppose, is in the lambing percentage of the different types of sheep. So over the five adult years, we had 132% out of the first cross ewes and the SAMMS. The local merinos, the Loddon Valleys, and the Dohnes were virtually identical. And the Centre Plus merinos, the dual purpose type merinos were about dead in the middle. So we look at the lamb returns including the skins. This takes into account the lambing percentage, the weights of the lambs from the different breed groups, and their dressing percentages. So certainly, the first cross ewes and the SAMMS had the heaviest lambs. The dual purpose merinos were about 0.7 of a kilo behind, and exactly the same as the Dohnes. And then Loddon Valley merinos were a bit further behind again. But they were about 3.3 or 3.4 kilos in live weigh, in lamb weight behind it, the cross-breds. And they're also down by about, I think, 0.9 of 1% in dressing percentage. So the wool returns. OK, there's a lot more measurements in other documents about diameters and weights, all that sort of stuff. But the first cross ewes and the SAMMs, reasonably similar in fleece weight. The two merinos, the Centre Plus were reasonably similar. These certainly cut a lot more wool, but these were two microns finer. This is the prices of the actual times of when we went through them at the time the trial was running. And later on, we'll get to historical prices and look at that. And the Dohnes were a bit behind again in wool value. When we add up the lamb and wool returns, certainly we will make returns, wool returns, make returns, wool returns, that sort of thing. But these are returns per ewe and haven't got the DSC rating based on the ewe body weight and the lambing percentage built into it. And also, the lamb growth rate. So this would have a higher DSE rating because the lambs grow heavier, and so they've got a higher DSC rating than those. So this is a slide that skipped, and this is the ewe weights over the five years of the trial. So they were born in their home farms here, they arrived at Elmore when they were of age, they were joined as ewe lambs here.
We haven't included the ewe lambs results. They were joined for their first adult lambing there. They were joined for their second adult lambing there. And then we had three adult lambings over there. Though at what we'd call normal industry waits through that first two joinings. Then we had a wet summer, 20 inches of rain, abundant weeds. We had 12 months green feed and so the ewes went up in weight. And then next summer we had 14 inches of rain, we can all remember those. Especially in Northern Victoria, we had all those grass summer weeds, that sort of thing right through. Right. Now, John (WebbWare) will take over part two.
- [John WebbWare] Thank you very much for the opportunity. And look, I must say, Kieran's done a fantastic job with this trial over a long period of time, and a lot of you are familiar with a lot of the outputs which have come out of it, and continuing it with the new group of ewes. Quite different, but really valuable information which will come out of it no doubt. What I'm going to talk about is specifically looking at the financial analysis of this whole system with the different ewe breeds, looking at long term profitability of the different systems. And I'll just explain a bit of background. But I mean, in reality if you look at the Southwest Victorian Farm monitor data comparing wool sheep and prime lamb enterprises. And the prime lamb enterprises comprise both specials, prime lamb flocks, and dual purpose flocks. But there's a huge variation in profitability over the long term if you look at it. But drilling that down further, within the wool and within the prime lamb enterprises, there's a huge difference in the profitability of individual enterprises based on how they manage it, the genetics, and so on. But you can see, commodity prices insistent. And seasons make a huge variation over the long haul. So with that in the background, we thought to determine long term profitability of the enterprises requires quite a sophisticated analysis. So we wanted to look at long term climatic conditions so we modelled it over about 20-odd years, but you could have done it over 100 years, it just takes longer for the computer to generate the outputs if you do it over 100 years of actual climatic data. And we've used actual commodity prices of wool, lamb, grain prices as well over the long haul. And we've had fantastic seasons in there and hideous droughts as well, so that's been a pretty important point. And also, I mean when you look at the per head stuff, to look at overall per hectare profitability, you gotta consider the ewe size as well because obviously bigger ewes might have better per head performance, but what about their per hectare performance? So we've taken into account relative body weight of the different systems as well. So we thought we better trial it over different areas as well, analyse over different areas. So we've done a Southwest Victorian Hamilton perennial rye grass type pasture, 15 DSEs per hectare. And then looked at Elmore with two systems. A lucerne crop system where the lambs are finished and sold by March.
And also with an annual pasture system and crop where lambs are sold by November. Also we've gone up to Northeast Victoria as well, have looked at Rutherglen running 10 DSE per hectare. Slightly different lambing date based on when would be most profitable for the different areas. So for a ewe lamb enterprise and lambs are sold by November. So we've looked at different areas, the outputs in terms of profitability with the core data that Kieran's generated out of Elmore. So if we look at just from a seasonal variation, you can see at Elmore, Rutherglen, and Hamilton quite different. I mean, obviously higher rainfall down at Hamilton, that's a black median rainfall. The average rainfall is the black line. But you can see the variation there. And the medley shows is the very wet years at Rutherglen are as wet as the wet years at Hamilton, but the dry years, the drought years are a lot worse down at Rutherglen compared to Hamilton. And that similar large variation is also at Elmore as well. Tighter seasonal less variation at Hamilton, no surprise there perhaps to a lot of people. If we specifically look at what's happened with long term land prices, it goes up and down over time, but there's been a trend and obviously you'd have to have been locked up in somewhere without any communication to understand that land prices have been at the higher end more recently. But some of those years, even more recently, if we adjust the earlier prices with inflation, there's no massive difference between them, but it's certainly been trending up. And in the first half of the year, the land price tends to be a little bit less than in the second half of the year. A couple of exceptions if you quickly scan across there. I think 2005-6, spring and early summer was better than autumn, and same with 2012-13, and same thing. And if you look at wool prices from our system which ran from about there, there hasn't been huge premiums in contrast to beforehand. But we still factored in, for the different types of sheep, the premiums and discounts for what they actually physically produced out of the trial. Then we look at grain prices, long term, again, adjusted for inflation, so all talking in current dollars. And you can see there's been these spikes usually associated with drought. ordinary year drought in some areas, full on drought, major drought, and following year major drought. Although that 2007-8 year were a world spike in grain prices as well. That happened as well in world supplies. But interestingly, the 2015 year which was pretty much a severe drought in a lot of areas, because world grain prices were so low. I mean, that was a very unusual drought. Cheap grain, so it was pretty easy to justify feeding them for short. So we factored in those long term commodity prices as well. If we look specifically at outputs, and there's a massive number of outputs. We'll just take a few snapshots here. You can see this is up at Rutherglen with the annual pasture system with first cross ewes. And this is the actual gross margin per hectare for the first cross ewes with those commodity prices and local seasonal conditions in farm system. And quite a big variation, but this is a period of moderate or lower land prices. Really got hit hard with very poor seasonal conditions over those 2000s. And then more recently, a pretty good year. Seasonal conditions and excellent land prices. So you can see there's quite a big variation over time. So that's one set of data. If we look down to Hamilton with the perennial ryegrass system with the first cross ewes, what's really striking is that they largely missed out on the really tough seasonal conditions, although 06-07 and 07-08 were still pretty serious droughts down that part of the world. But compared to other areas of the state, the impact wasn't nearly as apparent which was quite interesting. And for people looking down to Hamilton say, "Yeah, well that's right." And for the locals, they might debate that, but that's the reality of it. And certainly based on all the information I've seen from producers across Victoria, it's giving pretty consistent and realistic outputs. If we drill down to the different enterprises, and this is a summation for Rutherglen, but a similar picture across the board. The blue is from 95 to 2001-2. The red is from 2002 to 2008-9. And the green is 2009-10 to 2015-16. But what's relevant with this? I mean whilst there's differences with different seasons in those seven year blocks, you can see the relative ranking between the different ewe breeds really didn't change across the board. So in the blue, in the 95 to 2001-2, the first cross ewes in this first column, their ranking was similar to the Lodden Valley merinos, and the Centre Plus merinos, and Dohnes, and SAMMS, and so on. So that relative ranking really didn't change across the board for the different ewe breeds and the different sets of commodity prices and seasonal conditions. I mean look, what I see in reality, that's exactly the case. People all say, "Oh, but we're different down this area." Well, that's not quite true. There is local circumstances which do tweak things and all that sort of stuff, but that sort of output was pretty predictable from my perspective in reality. If you just drill down to look at the last seven years, which a lot of people actually got better recollections of, you can see that this is on a gross margin per DSC level so taking into account those body weight differences, we're taking into account depreciation differences depending on
longevity and also the actual long term values of sheep and so on. But you can see that there is quite different differences between breeds, and I'll let you make your own assessment of that data. But it's quite compelling differences in different ewe breeds, which is really important to realise. If you look at combining all the different systems together over the 21 years, you can see that relative ranking across the different farm systems doesn't change with different ewe breeds. It's largely the same. There's a bit of tweaking between the systems, but it really doesn't change your overall picture to what that previous slide was showing in terms of the relative ranking and performance of the different ewe breeds in this trial. And I think that's an important message to understand. We'll just finish up and if there's any questions to finish up, that would be terrific. But look, the reality is there's large differences in profitability based on ewe breed in this data. And when we used actual data from the trial and combined that into a whole production system to give our outputs. I mean, key factors include the fleece values of the different breeds, reproductive performance, lamb values, ewe depreciation, ewe body weight taking into account that stocking rate part of the equation. So in essence, do your sums carefully when you're looking at the different systems if you're looking at changing because it's not just a simple answer of looking, "Aw, this one's got a high lambing percentage." What about the reproductive performance? What about the lambs they're producing? What about the fleece value? So at the moment, 2016-17, obviously a large increase in the value of merino wool and finer wool, and so that's gonna put more it just at the current time it's going to look better for those, the merinos in the system. So anyway, we'll leave it at that. If there's any questions, fire away. And so we've got a few minutes I think before we have to move on. So any questions? And look, one thing I will say, there will be a more comprehensive report will come out of this, so you'll have the opportunity to look at it in more detail. This is a snapshot of where we're at, but it's certainly been an incredibly powerful bit of analysis using that data that Kieran and Elmore group have generated over a number of years. OK. We set the lambing time for the different systems. What we considered was the biological optimum for the different areas. So I don't think it would make a big difference, but it does tweak say for example, I mean more so cross-bred ewes earlier you go. All of them are going to be subject to a lot more feeding, but there's going to be a penalty for reproductive performance going earlier, particularly with the cross-breds compared to the merinos. But we set the lambing time based on what we considered was pretty much the optimal time for those specific areas based on a lot of grass grow modelling. So I don't think in essence it would change the fundamentals of those results.
- [Kieran Ransom] No, it wouldn't change it. But with the actual Elmore figures, we did change the lambing time around a fair bit, so we had some early lambings and some late lambings. Because if I lambed early all the time, the cross-bred ewes would be at a disadvantage because they're more seasonal breeders. And we looked for that. We had five different lambing times and there was a slight trend to lower lambing percentages with the cross-breds with earlier ones. But yeah, might have been about six or seven percent compared with the others. You know, 'cause we had two lambings and then So it was as you'd expect. So what we're presenting there is the average.
- [John WebbWare] Yeah, two things with this. I mean it would be fantastic to do the whole farm system thing with a self replacing thing, but we're talking a serious amount more investment to do that biological thing.
And that's why things like grass grow are fantastic for modelling that. If you did that whole thing on a larger scale, you're talking several hundred thousand dollars. And I mean, most of this was done with volunteer workers, an amazing bit of work. But Kieran's got a bit more data to comment on that.
- [Kieran] Yeah, just on that which was section four of the show, but we just haven't got time, was an analysis of a local farm that had about 14 years data comparing He had a dual purpose merino flock. They weren't Centre Plus, but reasonably similar to it. He had merino weather lamb whites and prices and cross-bred white Suffolk merino cross prices for 14 years to make a comparison, and we went through that. And basically, the short answer is a merino ewe, rearing replacements for the other half of the enterprise and selling lambs as merino weather lambs in autumn after shearing them just before sale is about equal in profitability with loosen. But we're finally done that system because that fella had accurate figures over a long period of time. But in other systems, we don't know.
- [John] I think, just to add to that, and it's really important with the merino side of it too is don't forget those fleece values 'cause they're just so important. I consistently see this.
- [Chair] Just a few more questions, yeah.
- [John] But I mean in terms of the relative it's so important in driving the profitability. I've seen people with sort of merinos, and a lot of them to be perfectly honest have drifted out. That's one of the reasons why a lot of merinos have drifted out. It's actually been a very good drafting rate for a lot of the less profitable blood lines of merinos, I must say. But it is so important in essence if you're doing everything else the same and you've got a fleece value which is 15 dollars high for no extra effort, that's all to do with genetics, you can't ignore that in terms of the bottom line. It's a really important thing. And there's this huge variation if you look at the farm monitor group data, there's really good merino type enterprises and there's really good composite enterprises, first cross ewe enterprises. It's how it's managed, and that's a good thing. All of it is in management and control, and that's where the real opportunity is.
- [Kieran] More questions? That Elmore loosen system was seven and a half DSC. That's including crop and stubble grazing, winter grazing of cereals and summer stubbles. On the uncropped area, it was about 9.3 DSE in hectare which reflects reality on about three or four farms around here that are giving me a lot of figures to back it up.
- [John] So we tried to use real things. So I mean the question is would things change in the relative ranking? And I think, I mean, one thing you could say is what about things like worms and all that sort of stuff in higher rainfall areas, and that's certainly a factor which you need to consider with some of the merinos in particular in the higher rainfall areas. I think one thing, and Charlie made a comment last night and he's quite true about I mean if you put a high production composite into a really dodgy environment, it's gonna produce pretty low value, crappy Any store lamb's worth money this year, but I mean year in year out, it's not going to be a very exciting enterprise. And that way you're more focused on the wool side of things, it's not as exposed to that thing. But I mean on the other side of the coin, the specific ewe only type enterprise is by far the best one for fitting into the pasture growth curve in most areas. It fits in really well. And whereas more dry merino, more dry sheep it's a lot flatter in terms of you can push your weathers harder, and all that sort of stuff. But again, it's a really dynamic system and there's all these factors need to be taken into account. So whenever somebody puts up their hand to say, "I'm sick of this, I want to change." It's really important just to look at all those factors when you're making that change, OK?
- [Narrator] Authorised by Victorian Government, 1 Treasury Place, Melbourne.
Managing self-replacing maternal systems
John Keiller, composite Breeder, outlines what drives their system and key aspects that they monitor and aim to improve.
(Presenter: John Keiller, Composite sheep breeder)
- [John Keiller] I got asked to just give a bit of a history of composite sheep and what sort of makes me think and tick I guess, and what my story is, and how composite sheep are where they are and where I think they might go into the future. So we had Border Leicester Merino sheep for 30 years, that was the background of sheep in our area. I went overseas, to the UK, I came back in 1990, and I wanted to change my animals. It was at the start of performance recording with LambPlan, which was just kicking off. I didn't want to go to the grade with the same animals, and I knew I needed change to get some of these things to happen on my farm. This is what I needed. I needed some more meat, I needed less cost. More meat per hectare, less cost. I needed more lambs alive and less ewes dead, I needed animals I could control in that area. I knew I needed more growth so I could harvest pasture better, so I need faster growth and heavier weights. For us, we need internal parasite tolerance, resistance, resilience. I knew I needed a simple system, so that I just knew where I was all the time. I need to control risk, and I knew that genetics were going to compound and make things hell. So these are some of the things that self replacing systems allowed me to do. I've been able to control the DNA, on farm expansions it's very easy to lease or purchase, you know exactly the animals you have when you move onto the place. You can buy a place or lease a place on Saturday and put sheep there on Sunday or Monday. If you have fire or drought, you lose animals, something happens, you keep all your ewe lambs, you mate them, and you're back in the game. It's not like you've got sheep and it takes you three years to restock. Lower cost of production, health status, and we can add value to some of the animals we sell. So, for hardy animals, for us they've always had to be out in the paddock. So rams that perform well in sheds, their daughters perform well in sheds, that's no use for us. Rams under silos are always fat, their daughters have to be run like that, they're no use for us. Changing environments, because we've got a changing environment there's always risk, and so we need some animals that we can actually change to the condition scores on a time. We've got the ability to get in lamb and survive. Our parasite tolerance now has meant that this last spring time, our adult ewes, we expected to have to drench the whole the lot on the first summer. Reduction drench, and they came back and they're low. And we go, we're starting to feel the value of that coming through the flock, because we've spent so much time and effort over time. And there's characteristics that these animals have. Now just by being performance recorded that you like, because they keep turning up a the yards. Every time they turn up at the yards, they must be alive, that's the first rule. It's always the rule too. Just a bit on current production. This is two 2015 and it's three of 2016. These are straight off stud records, these are some singles. Birth weights would've been too high for optimum survival. They're growing at 440 grams a day, they're 50 kilos at about 90 days. So 87% survival of those, and 11 ewes to the hectare, our single stocking rate, they're doing 500 kilos to the hectare of lamb. That's at weaning time too, with some growth time after that. This is our singles, twins and triples in 2016 after stud records. Interesting to see that our stud twins are still too light for optimum survival at 4.3. They were too heavy that year. Triplets here at 3.5. At these sorts of survival rates and those stocking rates, we're doing about 400 kilos per hectare of lamb. And they equate to around 20, a little bit over 20 kilos of carcass weight per ewe joined. And this is just from Sandy McEarchern, came through MLA the other day. Our ewe stocking rates are about right on here, about 8.3 for an 830 millimetre rainfall. We're doing 24 kilos of lambed dressed, or sold, per ewe joined. And that's at weaning time with some growth, so we're doing above that. This statement here, 250 grams a day. Producers get caught up in weaning percentages without measuring growth. I think we need to have another look at that. And we're just talking so much about more lambs, more lambs, more lambs, but those growth rates are allowing our properties to get very good returns, and that's the top 10 producers out of 60 producers in Southern Australia, down into Tassie, with prime lamb systems. So that's what the top 10 producers were doing, so that's pretty hot of the press. 2,000 stud ewes with twins in them the other day, there's a $25 per ewe genetic difference in them, maternal ewes from $115 to $140 maternal dollar index. You can't tell me where the best sheep is. I can read ink on paper, black ink on white paper. We've got sheep in there that are gonna do no money at all. We've got sheep in there that are gonna have one lamb at 120, two at 100, or three at 90. They all walk past, they're white and they're woolly, we just have to get into the numbers. We have to measure them, and we have to just keep pushing into that area. This is what I'll talk about now, every day thoughts. This is what I think about. Pasture consumption, ASBVs, yearly action plan, some survival and pregnancy scan, and some ewe lambs and a bit of blue sky. Growth is the characteristic that sets or system. We lamb our lambs down at a point, and they've got so much time to get to when the pasture dries off. So it's that patch of time. If they grow faster we can lamb later, to get to the fixed point of time when they're finished. If they grow slower, we have to lamb earlier. But growth's got very interesting things. What it does is it changes stocking rate, it changes pasture utilisation rate. And so there's a three-dimensional loop that operates around growth. And what growth does is that, one of the things it does is it allows you to change your reproduction rate. Because, this is January to December, shorter day length. Number of ewes cycling and reproduction rate. So the later we join, the higher the reproduction rate. So if we can have fast-growing sheep and we join later, we get higher reproduction rate. And then, by having higher reproduction rate, we then have the ability to eat pasture. There's our spring curves in the last few years. And so what we're really doing is in our system, we're dropping lambs here, and then we're trying to eat as much in the spring as we can. So it's your job to decide if you want to eat how much pasture utilisation. That's us this year, 45% to what numbers, sometimes I read 45 in the paper this week. We're this much. But by having fast-growing sheep we can lamb them here, we can have higher reproduction rates because it suits the system. We also know in mid-pregnancy they're only at 1.3 DSE, then 1.4, and then when they lamb they go to here. So if we lamb over here, we can't get many sheep in the spring time. So the more we go over there, the more we eat, so we're just more efficient. Up to 70% when you've got pasture degradation. And that's about what happens with that reproduction thing. Ewes are doing 100 in November, ovulation rate. They doing them May, which is right at their peak of ovulation at 200, to about 17% ovulations a month, it's about 4.2 a week, at 75% embryo survival it's 3% lambs a week. But if you change it on your farm just a week, you won't know, because you've got the year-on-year effects. But that's really what you're doing. So fastest sheep, growth sheep, will allow you to change the efficiency of your utilisation system. And really what's happened is that, in the last 15 years, we had 18 kilo carcasses, and now we've gone to 22 kilo carcasses nationally. We've got 4 kilos carcass weights, about 8 kilos live weight. And all the increased genetics we've had for increased growth has allowed us to change the product. But what's happened is the abattoirs have changed their specs from 18 to 22. If they hadn't have changed their specs, the genetics we have now would've allowed us to actually lamb a month later and still have the same carcass weight lambs come out. The abattoirs have used all the genetic space we had to be more efficient at pulling weight per hectare out. Genetics are just like a peg in the ground. I just think of genetics as a peg in the ground, they are where they are. You then decide where you wanna move away from that peg. So, define your directions. For me, it's growth, number of lambs and parasite resistance. So I need to know they're there, I wanna go there. I do some feedback off my lambs, I wanna move there, I go and see what my reproduction rate, I wanna go there, if I need something on internal parasites for me, I go there, there, there. So I keep moving away from this fixed position. Rams provide the new DNA and they're 80% of the change. In maternal rams, if they mate 60 ewes a year for three years, 200 roughly, they've got five lots of daughters that are there for five years. Their daughters are there for five years, and the great granddaughters are there for five years. So maternal rams have 600 expressions of their own DNA. Terminal lambs have 200, Merinos have less. So when you understand that, maternal rams have far-reaching long-term consequences, because they have so much of it carried on, intergenerationally carried on. So culling of ewes, you're gonna go spend a lot of time mucking around culling a few ewes, or you gonna go and put some rams in the front, let the whole thing flow on for the next 15 years? Which one's the most important thing? So culling of ewes is just really fine-tuning down at the end, taking a little bit of dead wood out. This is just maternal indexes. This is the old maternal index, in two here with some new maternal indexes. This one here had, this one here's the one that's giving us a lot of growth here at post-weaning weight. You'll notice here that if we start to actually reduce adult weight, here, we've got minus on adult weight, we've got some changes in reproduction rate, six back to two. Right, we've got some changes in post eye muscle depth from four up to seven. So we've got a range of indexes we can use, the question is, which one do we use and why? So if you add some slow-growing sheep, and you really needed to get them to market in a fixed time, you'd probably put some more growth into them. There's other people out there at the moment who've got some large sheep, who are saying we don't want our sheep to be any bigger, so we're going to actually cap out our weight. So there's a whole range of tools out there for you to use, systems to use, you just have to decide, that's where the DNA is, I know where I am, I need to make a change. So use LambPlan figures to to that, and then use the RamSelect app, you can go and sit in and type up all the parameters you want, and search and suck out the animals you want out of the national amount of rams that are available. Just on differential management. This is March to February across the year for us. This is how we organise our ewes. Condition scored here in March at joining, we'll preg scan them here in June the other day. And our singles, twins and triplets will then go at different stocking rates from the day of preg scanning, we'll do another condition score at weaning time, and then in January when we shear them we'll do them off the board, just on eye. So we've got four or five times of the year where we've got differential management of the ewes to try and give them all the best opportunity we can. This time it's set stocking, we'll have paddock size and shelter and pasture quality involved, so that we put all the animals in the right place at the right time, on different pasture levels. And hopefully get a five kilo birth and a 250 grams per day and a 45 kilo lamb at the end. If you go on to survival, we'll just do a bit on survival. Knowing that this is little lambs and their survival, are we putting enough time and efforts into areas that will give us the best bang for our buck? So here we've got starvation and mismothering. I think we'd have to get up in the morning and say that could be the priority. After that, dystocia, big singles. What's gonna happen this year? You know, that's why we preg scan to reduce that. Every time a lamb dies, one lamb dies per 100 ewes, at $100 lamb it's a dollar, dollar per ewe, click click click, click click click. It's the cash register. So we need to look at those and make sure we're targeting what we need to get the best. Just for us, for cold weather, potential heat loss here. There's a combination of velocity, temperature and rainfall, that's how you measure it. And this is the difference in mortality when you get to that combination of those three factors of 1,00 wind chill. So if you've got Merino twins, go and put them somewhere where you can keep the little fellows alive. If you've got cross-bred singles, they're pretty tolerant aren't they? But these little fellows here, there's plenty of them out there, this year, a lot of Merino ewes preg scanning 150%, that means half the ewes, half the ewes of this zone, they need to be looked after really really carefully. So we're quite mindful of that, so we get them in the right place. And if you do a good job with either trees, or some of shelters, tall wheatgrass shelters, that's what you can get. Preg scanning, just home numbers. 38,000 ewes in the last few years. These are 90% maternal composite ewes, 1 1/2 to seven years of age, approximately. 3% empties, 30 singles, 60 twins, seven triplets. That's the breakdown you get. So that's year after year stuff, that's what my farm does. So when you see that, you go well okay, I know I'm gonna put them somewhere. I know that I've got three lambs every, there's three lambs inside every one of those. Which equates to not many of that, so they become very important. As soon as you give that triplet number goes up, you start doing things. To get little lambs alive, birth weight. You know, those numbers I showed, those numbers before I had triplets here at three five, there, not good enough. Four five, those are the fellows, that year where they are too heavy they were up here. The graph's starting to dip over. So we need to be mindful of that. The condition score of the ewe. The condition score of singles, optimum, 90% survival, 2.9. Anyone got fat singles this year, you're gonna peel about 8% survival off. That's eight bucks a ewe. You go to twins. Here, it's the other way. They're different sheep. She's got that requirement, she's got this requirement here. So we need to then not just leave them here, we need to put some twins there and put some singles there and get a better result across the two. And that's what happens when you get it right. A set of triplet studs last year, 164 of them, 234 lambed, 234% at marking time. Six paddocks of five hectares with trees all around. So if you do it right, and that's in a year that's had like, mind you about 45 inches. So little blighters do live if you give 'em a bit of a chance. Ewe lambs. It's 406 ewe lambs here. These are their fathers, their nine fathers, this many in each group. At eight months of age, 242 days, they're all out of adult ewes. The preg scan of them, this happens year after year on the farm, 155%. The average in the middle. This ram here, his daughters did 127. This ram's daughters, 182. You got the wrong father, you won't have lambs. That's the message, it comes out time and time and time again. You got the wrong father, you won't have lambs. We had quite a lot, had 8,000 ewe lamb records analysed. If you're born a single, that's your reproduction rate, as your live weight changes. If you're born a twin, that's your reproduction rate. If you're born a triplet, that's your reproduction rate. So which one are you gonna keep for replacement ewes this time? This is when they have lambs. Live weight against their weaning weight of their own lambs. So where are you gonna keep the replacement ewes from? Better keep the multiples, I reckon. This one here, 19, 20 months of age, one and a half year olds. Those ewes for next time round, black. If she didn't scan a lamb as a lamb. Where is she? Not a very profitable beast. There're all these graphs are straight and they're linear, so yeah, where are you gonna keep them from? Which ones? Just got enough time to throw that one in. Condition score ranges. You don't realise they're as large as they are. Three score ewes here. Three score ewes here at 50 kilos and 80 kilos. 30 kilos on the same frame, on the same ewe. That's the different weight against the condition scores. You don't know they're like that in your mob. That's straight out of some of my stud data, I did that graph the other day and was surprised. So by joining ewe lambs we do get a chance to actually keep some of these weights down, and probably be a little bit more efficient. Just, Darren Gordon's involved with effects of mob size and stocking rate on lamb survival. We'll be involved with that this year, this is a bit of stuff. Pregnancy scanning multiples, putting singles and twins in separate paddocks of sizes, trying to optimise the right size for survival. And keeping those records, so that's a bit of new research. We've been involved in genomics. So maternal sheep have got very good eating quality, however there's a range. We're testing our sires, and if we have sires that have got, when we get a choice, we will tend, or we won't use rams that have got a lower eating quality, and we're looking forward to some indexes coming into maternal sheep in the future. Mark Ingliss talked about here the feedback loop, which I'm looking forward to having animals come back into the database, so that we can make maternal sheep better. We'll continue to keep working on ewe-lamb mating potential. Because they're at eight months of age, they're reaching puberty now. And the New Zealand data shows that we should be able to get that back to 7 1/2 and keep dropping it lower and lower. So we're working on that. Number of lambs weaned from LambPlan is now the ability to split number of lambs born, weaned and survival into three component traits, which will increase that area. We'll continue to do some work on adult weight and condition score with efficiency, and all our sheep will stay run under the paddock conditions like they need to. So after 30 years later, from my trip to the UK, I don't think it's much different, those things are still there and these animals are delivering into these areas that we need on our farm. And making us a good sound dollar. So that gives us a little bit of time for questions.
- [John] Basically paddock size, because it's about how many ewes are lambing on any given day. So paddock size is one. The issues you have, the triplet ones are quite an interesting one, and you see it exaggerated there, you must be quite careful not to put triplets in a paddock with too much grass, or they all tend to go into one area, the favoured grazing spot, might be a bank up the corner, and all lamb together and get mismothered. So Kiwi trick is to put them on just enough pasture that your ewes don't get preg docs, but that actually drives the ewes apart in the search for feed. And that allows them to just be there, there, there, while they have their multiples, so high number of multiples, but there's just enough feed growing underneath them. So they often actually stock them on less pastures but with actually ability on a lower stocking rate at 5 1/2 to six to the hectare, where they would have been normally, then the pasture grows through underneath and pretty quickly. So that's a very good thing on multiples.
- [Audience Member] So in that as well, if you are stocking them on less pasture, do you supplement with, are you supplementing with grain, or pellets or anything like that?
- No, not in our situation. But if you had twins, I mean basically all you can do is reduce your mob size down to as low as like 200 or less, whatever the recommendations are, and then put them on the correct amount of pasture. Because they're gonna have to stay there. With triplets you get the ability to put them on a little bit less, because there's actually less ewes per hectare, and the pasture, within a week or two, grows through underneath them, and that just helps you there.
- [Audience Member] Do you actually try to early and late plans when you're scanning?
- Yeah, we early and late, and the scanner takes about 15%, probably about 15%, probably not even quite that, with just a different colour. So then we've got all the main sheep going through, and if we're going around ewes each day, that means you don't have to go around 10%, when you get to the end of lambing, you've only gotta go around those. You can actually start lamb marking another 10 days earlier. So when you go marking for a month, they start this big, and they end up this big at the end of the month. So it's a very very good tool, to just make the farm run a little bit better. Keep the boys who are picking them up on the go too. The question was, what criteria do we use to select rams to breed us ewe lambs that would get in rams? So we would go and look at the yearling number of lambs weaned EBV, because it's the one that will allow us to pick out that ram that was producing daughters, or having a group of daughters at 182. And there's a very high correlation from that piece of information and the yearly number of lambs weaned EBV. If you actually look at it, the graphs are just linear, I've got those graphs. So that's the column to look at.
- [Audience Member] You mentioned something about the effect of maternal ram, against the merino ram. What was it, bigger than you quoted?
- [John] So it's the expressions of DNA, because a maternal ram has his daughters there for five years, and then their daughters are there for five et cetera et cetera. And you end up with so many expression of DNA from a maternal ram compared to the merino rams with lower reproduction rates et cetera et cetera. So you just get more bang for your buck from breeding a female animal. The female animal is the animal that's the engine of the farm. They have a female, yeah. Growth rates, what's the number. I saw it the other day, I reckon I saw my ram lambs in the stud were about three or four kilos heavier at weaning than ewe lambs? I just clicked the numbers and they just popped up. The number's pretty well defined. It's a percentage, yeah, a little bit. You'd prefer all wether lambs if you're killing them and then females that you're keeping. In my system, well I suppose, if we get it right with multiples, with triplets, it's at 80% survival, it's 240%. And I know the numbers, ewes with singles, ewes with singles and they'll produce a 50 kilo single. Ewes with twins, they'll have two 45 kilo twins. But the best ewe each year will have three 43 kilo triplets. So once 15 years ago we couldn't get over 100 kilos of lamb weight per ewe, that was the Holy Grail, right? Now we've got to 128 kilos. So there's individual animals, and they are doing 128 kilos at wean. And you just go, well.
- [John] We don't know, we don't know. So animals are often about 10 years ahead genetically in farm systems than the management that comes in underneath them. And that's a global thing with animals around the world. What do they say about dairy cows? 80% of dairy cows are only fed to appetite 20% of the time.
- [Announcer] Authorised by Victorian government, One Treasury Place, Melbourne.
Lifting production by oversowing with cereals
Bindi Hunter, (Agriculture Victoria) and Tim Leeming, (producer) present results of a Producer Demonstration Site where they oversowed cereals into a degraded perennial pasture to improve overall production and the composition of the pasture.
- [Tim Leeming ] Can everyone hear me? Right. Yeah, so just a bit of background on how this eventuated. A local farmer by the name of Rob Close had been doing a bit of cereal cropping into some existing phalaris pastures. With a lot of us as well know, supplementary feeds in the grazing system is one of our bigger costs. And not typically in our area are we a cropping area, we're in the northern part of Southwest Victoria, south of the Wimmera, we're undulating red gum country in about 600 mil rainfall zone. Sandy loam sort of soil types, so cropping, I would say, can be done quite well on well-drained country, but it's also quite risky in wet years. 2014 and 15 were really good examples of years where we had failed springs and sup feed sort of rises to the top as a major cost to our grazing businesses. And a lot of the group, my best full group, some of the guys had come home to pastures, that as Charlie DeFegely mentioned last night, some of the feed base has been let go a little bit. So a lot of guys had bought country, or had leased country or whatever, that was run down, but they also had some pastures that had a good base of perennial within them, and we were sort of looking a system where, can we put a cereal crop in there, can we clean up those pastures and preserve the phalaris? So that's how it sort of started. So as you can see here, this paddock for instance suffers from low fertility. It has got a good phalaris base in it. There's a number of annual weeds, grass weeds in there, you can see onion grass, and also there's silver grass and barley grass, so we can all probably relate to those type of pastures. And this particular paddock, and if you're gonna do any cropping in our area, we gotta make sure that it's pretty well-drained, otherwise it becomes a high-risk activity. So the purpose of the demonstrations were to, cropping into an existing pasture. We wanted to put some data and some numbers around all these demos. And we wanted to look at, okay can we clean the paddock up, can we actually get a bit of recovery in the phalaris and actually improve the health of those plants? Improve our ground cover. Can we still yield a decent crop off this system? And then later on, after the first year, we actually got some additional funding through and EPDS through MLA to actually overlay some grazing on these trials as well, on these demos. So we also wanted to, with these trials, we wanted to analyse the livestock performance on these crops as well. So it was sort of like having your cake and eating it three times, that's what we were sort of hoping to do. Hands up in the room who's done any cereal cropping into perennial pastures, or phalaris pastures. Great. Who's grazed crops, cereal crops, in the row? Great. No worries, I'll hand over to Bindi.
- [Bindi Hunter] Thanks, Tim. Okay, so this just shows, the green here are the sites that were just sown, cereals sown into pasture, and then the orange were the sites that were actually grazed in winter. So we had two sites there in 2015, and three in 2016. Over the three years we ran the demonstration, we had three really challenging years. So this shows our growing season in 2014, and we were at decile one. And then 2015 growing season, much the same, decile one. And apparently this was the driest two consecutive years on record in this region. So we followed that up with 2016, highest rainfall on record. And so we did see quite a lot of waterlogging in that year, and our crop yields for some crop were affected as a result of that. So I've got some photos just to show you what it looked like, what the system looked like and what we did. This is Tim's site in May, just prior to sowing. And this is our chemical regime, which was provided by Darren Scott, who's with SMS Rural, he's based in Horsham. We started with a spray type in the spring before, and then we kind of got a spray regime that pretty much took care of anything that had germinated and suppressed the phalaris. And then we sowed in May with 100 kilogrammes a hectare of quoll oats with 100 kilogrammes a hectare of MAP. This is the same site when it had established. And here we are, the same paddock, in July. And in July we generally did a post-emergence spray just to get rid of any cape weed and onion weed, and broad leaves that were there. Although last year a few of the sites were too wet to get onto with the post-emergent. And this is the same paddock, just in November 2014. And you can see all these beautiful phalaris heads cracking their head out through the crop. Here were are post-harvest in 2014, the same paddock again. And then by March we were starting to see the phalaris coming back. And here's that same paddock, a photo taken last week. Tim's paddock. And it just had a really solid phalaris base. And Tim was carrying 20 DSC per hectare through winter on that pasture. So this shows our expenses, our costs over those three years, which came in around $300 a hectare, and that includes our operating, chemical, seed and fertiliser. And the benefits that we started to see, just purely from sowing those cereals into perennial pasture were that it was great. We ended up with much cleaner pastures, we got rid of onion weed where it was a problem, got rid of our broad leaves and annual weeds as well. And this is one site, this is a photo just after it was established. And this particular paddock was a sea of onion weed. And it did have a reasonable philaris base, though. And here it is at the end of October last year, and you can see it's just a much cleaner, and it's a very productive phalaris pasture now. So what happened to our phalaris? Well we did find that there was a slight reduction in plants. This shows before the crop went in, and then roughly a year later. And we did find that there were slightly fewer plants, and we feel that was probably a result of the impact of sowing and using tines. And the group felt that perhaps to do it again, they'd probably rather use discs to try and alleviate that problem. But we also found, this shows our ground cover, we also found that the plants that were there were bigger. And they'd tillered, and there were shoots coming from the crown. Yeah, so despite the fact that there were fewer plants, what was there was bigger and we had a larger ground cover of phalaris as a result. We did find though, that anything, the group felt, anything, pretty much, under 10% ground cover to begin with perhaps wasn't worth doing, it was too gappy, and once the crop was yielded there was just not enough phalaris there to make it worthwhile. So this shows our yields over the three years. And it ranged pretty much from two to 5 1/2 tonnes per hectare. The 2014 and 15 dry years, we averaged 2.6 tonnes. And our wet year last year we averaged 3.6. But this was highly variable in this year across paddocks. I know one producer said his range was sort of from nought to seven tonnes a hectare, just as a result of the waterlogging.
- [Audience Member] Sorry, just the ones that have yielded, were they grazed at all, as well, in addition to yield?
- Bindi] They were grazed after, no. No. No actually, a couple of the them were, these two were, actually, they were grazed. But the other point is that these ones that were grazed here, the producer didn't feel it was worth taking them to harvest so they grazed them. And someone else cut them for silage, and found that was a really productive use of his crop. So just the value from cropping into pasture alone, without including that grazing, ranged between $126 and $404 per hectare. And in 2016 we had our highest yield with 3.6, but the price of oats brought our profit per hectare down. So on top of that, we thought it was a really valuable, there were other values that were perhaps difficult to put a price on. And you know, there's great flexibility in this system. It's sown, there's a pasture at the end of it. So whether you cut it for hay silage, graze it or harvest it, you've got all those options, but at the end there's still a pasture, and it was a cleaner pasture. And then there's also the benefit of grazing stubbles too.
- [Tim Leeming] Right, thanks Bindi. So, as mentioned before, we got some additional funding to analyse some livestock performance on grazing these crops as well. So these first year we were probably being a bit too smart for our own good, and we thought we'd use twin-bearing pregnant ewes, thinking that they were probably the class of livestock that probably needed the most feed at that time of the year. The trouble with that is, is the cost around, these are demonstration sites, they have a limited amount of money and resources, but we did our best in that first year by comparing the ewes that grazed the crops as opposed to the ones that grazed pasture. And we analysed, this is some feed test data off the crops. So you can see there that it's an enormous amount of energy in some of the quality measurements that we got off the crop. And we tagged at birth the lambs that came off those ewes. So the ones that had two weeks on a crop were slightly heavier than the ones that were on a pasture. And that makes a fair bit of sense to probably most of you, he highly-available and the super high-quality feed. So we had some real positives come out of that. Two weeks. So as you know, in the last three or four weeks, a lot of birth weight goes into foetuses, and that was our sort of idea behind that. The trouble is, it costs a lot of money to be running around tagging lambs, and time and stuff. So in the second year, I'll hand over to Bindi, but this is the yield data off that first year. As you can see there, the crops that were grazed, and the ones that weren't grazed, there was basically no difference in this site. The difference in this site is actually a tree line, that was, as you can remember, 2015 was a failed spring. We had a tree line along the road next to this grazed area there. And that had a detrimental impact on the plants because it sucked the moisture out of the crop. In the areas further back off the road, you can see there was actually no difference at all, so it was very similar to those areas there.
- [Bindi Hunter] We've got just five minutes, so I'll speak quickly. In the 2016 year we decided to simplify things, so we just grazed with dry stock. And we had three sites. Two we grazed with 10-month-old ewe lambs for 21 days. And one we grazed with one-year-old bulls for 21 days. And we compared one hectare of crop to one hectare of pasture at the same stocking rate, and we measured our live weight gains, and we looked at the value and production of the crop and pasture. And then we once again looked at the impact that grazing had on our yield. So here's a photo of the pasture at the top that was grazed, compared to the crop at the bottom. Three different sites. Three site, the pasture wasn't great at the top, but the green paddock was kind of representing the plot they would be using for that stock type. We've got pre-grazing crop in the top left hand corner. Post-grazing, in August. Then we've got an equivalent ungrazed area in August. And here, this line has, we've got the grazed site here, the ungrazed site here. There's very little visual difference by October between the grazed and ungrazed sites. Our feed production and quality, once again our crop was better than pasture. It wasn't quite as good as it had been the year before, could be something to do with waterlogging. But we also had these massive crop growth rates that we measured that year compared to pasture. So that kind of combination of really good quality and a lot of quantity gave us these massive growth rates for our ewe lambs. So 414 grams per day in the middle of winter for 21 days, compared to 155 or 121 grams on pasture at the same time. And that equated to, when we used the August trade lamb price, that equated to an extra $222 a head, or $153 a head, over those 21 days, for the crop compared to the pasture.
- [Tim] A hectare.
- [Bindi] Per hectare. What did I say? Head. Sorry. It was the last slide, I didn't change it.
- [Tim] Really good shape, yeah.
- [Bindi] Bulls, we had a massive difference in growth rates. So 2.3 kilos a day on crop compared to 420 grams on that not-very-good-quality pasture.
- [Tim] And just to put that in perspective, last year was the wettest winter on record. And you know, feed was at a premium. We had a massive feed deficit because of the waterlogging. And that should get, those couple of last graphs there, should get a lot of people very excited. We were excited.
- [Bindi] We had low stocking rates because of that waterlogging too.
- [Tim] Yeah, we could've run a lot more bulls and a lot more lambs per hectare, it was just that we were rotten wet. So we're still getting 60 kilos of growth off the crops. And we thought we were getting about 10 to 12 kilos off of pasture at that time. So very exciting.
- [Bindi] So that worked out an extra $209 per bull, or $605 per hectare, crop over pasture, for those 21 days. Our yields were higher than the previous year, but there was a bigger difference between them. And like 1.26 tonnes per hectare difference in yield. And we put that down to the fact that it was waterlogged, and we had less leak area to use up some of that water, A, and B we'd sown earlier, and we'd grazed a bit too late, and we felt we probably cut into, we should've had our stock on by growth stage 30, and we were perhaps more like growth stage 31, and that was detrimental to our yields. And our yields came out ungrazed, $151 on average higher than our grazed, as a result of that. But by the time we added our value from the livestock growth, we ended up $200 a head on those grazed sites. So that was good. And this is with our establishment costs taken off, this is our income per hectare. Back to Tim.
- [Tim] So, sort of weighing it all up, putting it all together, and as Bindi pointed out before, bloody hard when you get two of the driest years in succession that we've ever had, and then get the wettest winter we've ever had. We had some fantastic opportunities to get some thumping good yields in 2014 and 2015, when it's mild winters, and then last year, well you know, last year we were down to two-wheel motorbikes getting around last year. So it makes it bloody difficult to get some averages. But one of the things that we were really happy about was the fact that we could get, we think, anywhere between 80 and 90% of yield potential. So a number of our sites had traditional cropping, either next door or on the paddock across the road, where it was total spray out, and then normal procedures with growing a crop. And comparing yields from what we were doing to our phalaris pastures, as opposed to a total spray out of everything there, we were getting 80 to 90, even 100% of that yield. So that was exciting. As far as your pasture improvement, it was really super beneficial. If you've got a run-down pasture, and you got onion weed and you got annual grasses in there, fantastic way of growing a crop, harvesting some grain off it, and clearing out a lot of those annual weeds and giving that phalaris a year off. So we definitely did see improvement in the plants that remained. As Bindi said there was a bit of plant reduction. If we had coulter tines or a disc equipment, I reckon we'd be a lot better, we were using knife points, and were just ripping the odd plant out of the ground. So if we could cut those plants in half, it would be a hell of a lot better, and we would think it would get virtually no plant count reduction. The meat value, putting that grazing overlay on top of that crop, it's just like the icing on the cake. And yeah, we were just absolutely blown away about some of the animal performance that we were getting in such a short period of time. And you know, as a lot of you that have been involved in grain and graze, if you use big numbers, in there for a short period of time, and you know, you can do a rotation around various crops around the farm, there's some really good benefit in utilising that growth of that cereal crop, but also actually taking, getting the benefit of getting your stock off existing pasture, so you can actually give them a spell and grow a bit of feedback in them as well. So some of the considerations. Make sure that, you know, as Bindi said there before, we wanna make, you know if your phalaris plant counts are really low, well maybe you're better off just spraying it out and putting a new phalaris pasture in there. But if you've got a pretty good core of plants, this is a great system. If you've got annual grasses that have encroached into those phalaris-based pastures, it's a great system to clear those out as well. If you can buy cereal grain for $100 a tonne, like we have in the last 12 months, we probably wouldn't put a crop in, that's the simple realities. But when it's 250, or $300 a tonne, it becomes attractive again. So yeah, and making sure that crop variety, you've got that ability, you know things like echidna oats, we wouldn't use echidna oats because we haven't got that flexibility to graze it. So something like quoll, or whatever, just had that little bit more potential to graze it as well. So we don't have to kill the pasture to grow the crop. We can use it for cleaning out the pasture of annuals, increasing the perennial plant size. Make sure you consider the plant count of your phalaris in the first place. It's good at maintaining that ground cover and increasing ground cover in those phalaris plants. Grazing the crop is important, we found. Often having too much stubble trash in the paddock can actually deny your winter growth in that pasture the subsequent year, if you've got too much trash lying on the ground. So actually grazing it, and reducing that stubble trash, was actually quite a beneficial thing to do as well. And the feed quality, as you all saw before on previous slides, was exceptional. And the growth stage, you know, you must adhere to grain and graze principles doing this. We got greedy, and I think the fact it was so bloody wet, and we had to wait a little bit longer, and we had a pretty good start to the season, so we sowed early, grazed a little bit late, and that had a bit of an impact, we think, plus the waterlogging. And you know damn well that you're gonna hit peak prices in your livestock in winter, and to have the ability to actually slam that sort of weight on is incredible, I reckon. So that's really exciting. Where to next? We're doing some trials at the moment. Not funded, mind you, it's just within the group. You know, cereals for us, I reckon is a really good valuable tool. We're doing some stuff using a variety of annuals. But using cereals just to get that bit more horsepower and growth in winter, bloody valuable in a grazing operation and we're pretty excited about using more and more cereals. So thanks very much.
- [Chair] Right, we've got time for a few questions, if anyone's got one for Tim or Bindi? Yes?
- [Audience Member] You mentioned the effect on legumes in pasture?
- [Tim] Yeah, so the question was legumes in there. So a part of that chemical brew that we had up, or Bindi had up earlier on, we did have sites where we just left the sub clover. So a lot of these pastures obviously got sub clover in them. So we just dropped the camber out of the mix, and yeah, you can just have your clover under the crop, it's not a problem. The thing is, sometimes the camber's taking care of a few other weeds at the same time. Because you're only, in a lot of our country, and a lot of your farms, you know sub clover, there's tonnes and tonnes of that, seed in there, so taking it out for that one
year, you saw in the photos there, you know there's plenty of sub to come back the subsequent year.
- [Audience Member] Have you tried an all-lucerne stand to see what seems to all lucerne?
- [Tim] No, no. So, putting cereals into a lucerne stand, and I know it's been done around the place. Lucerne is probably a higher risk. We get bloody wet, and we go dry really quick, we can finish up pretty quick. A lot of lucerne disappeared in 2011, and if there was any lucerne around now, it pretty much died, I think, last year in the winter.
- [Audience Member] You didn't see any phalaris establishment in your trash grow?
- [Tim] Yes, we did. Yup, and I sprayed it out. We had a site last year that I wasn't very happy with the amount of phalaris plants in there, and I just bit the bullet, felt wealthy, and I sprayed it out. But before we sprayed it out, we saw a lot of recruitment of phalaris plants. Just to take that pasture out of production for another winter to let those phalaris plants, I actually wanted to put a newer variety in, it was Old Australian, and I wanted to put some GT Holdfast in there, so we sprayed it out. If you were prepared to de-stock that paddock for another winter, the following year, I think we could get phalaris recruitment.
- [Bindi] We did have someone collect phalaris, like harvest some the phalaris.
- Yeah, yeah, one of the guys, he just put a different screen in the header and he collected an absolute bucket-load of phalaris seed. Obviously timed his harvest pretty well.
- [Audience Member] I have a question here, what stocking rates do you think was best for grazing?
- [Tim] Grazing the crop, what stocking rates? More the better. Yeah, big horsepower, that's get in, get out, and move on to the next crop, or whatever.
[Audience Member] So how was the trampling with that?
- [Tim] Yeah, with the waterlogging last year, we had to be really careful. If we had three bulls to the hectare and 10 lambs to the hectare, if we did that in 2014 and 15, and actually even this year, we would put another 50% at least stocking rate pressure on them. The first year we did the ewes we had, I think 22 ewes to the hectare. And they just got through it in two weeks. So that was the difference between a waterlogged year and a mild winter.
- [Chair] Sorry, that's all we have time for. Thanks for the presentation, Tim and Bindi, that was great. Please show your appreciation.
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