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Region: National

Look at a farm system

Date: 2010-05-21 | Category: Sheep & Beef

- as things really multiply up.

The powerful compounding effect works here too.

Taking a 350ha farm that currently sows 4% of area into new pasture, what happens if you increase this to 8%? 

First, some more assumptions  
Average farm size: 350 hectares
say 3000 breeding ewes  
Area presently renewed after crop [4%] 14 hectares
Extra annual income from renewing an extra  
14 hectares [4%]: $8,820 [$630 x 14ha]

Here's the powerful argument

If you sow an additional 14 hectares of new pasture every year the benefits compound: in year two, you sow another additional 14 hectares of new pasture, while gaining the benefit the extra 14 hectares of new grass sown in year one. With each passing year, the potential income lost from not regrassing an extra 4% of the farm gets bigger and bigger. Here's what could have been earned [we've factored in a 10% annual decline in the production off the new pasture]:

Year 1:  
Extra income from extra 14ha new pasture = $8,820
[see above]
Year 2: = $16,758/ha
Total increased income [$8,820 from new pasture + $7,938 from 2nd year pasture]
Year 3:  
Total increased income = $23,902/ha [$16,758 + $7,144]
Year 4:  
Total increased income = $30,332/ha [$23,902+ $6,430]
Year 5:  
Total increased income = $36,119/ha [$30,332 + $5,787]
Total  
Increased income before costs over 5 years = $115,931

Just as with dairying, income keeps stacking up when renewal of poor paddocks is undertaken. 

Total cost

 
Extra 14ha of pasture renewed on 350 ha farm renewal loses 1
t DM/ha growth [through 9 weeks out of grazing], so 14 t of dry matter is needed.
14t DM silage @ 30c/kgDM
= $4,200
5 year silage cost = $21,000
Direct costs of renewal [see Appendix 1] = $932/ha
14 hectares = $13,048
Over five years = $65,240
Extra ewes [5 @ $80] = 4400
Total Costs = $86,640
   
Net Benefit  
So the increased income = $115,931 
Total cost = $86,640
Total return on investment is = $29,291

*The estimated 1.0 t DM/ha supplement on hand for pasture renewal on sheep farms is less than dairy farms [2.0 t DM/ha] as less pasture production is lost through renewal. 

Appendix 1.

Pasture renewal cost assumptions

Direct Costs/ha   $ [ex GST]
Glyphosate 3 litres/ha $54
Application cost   $40
Cultivation 1 pass $150
Grass seed 20kg/ha $180
Clover seed 4 kg/ha $60
Fertiliser 150 kg/ha 15:10:10 $206
Roller drilling   $150
MCPB 4 litres/ha $52
Application cost   $40
Total cost   $932



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More frequent pasture renewal is perhaps the most effective way to get significant production gains in a New Zealand farm system
Don Nicolson

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