Look at a farm system
- 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 |
|
|
