Productivity and profitability of alternative steer growth paths resulting from accessing high-quality forage systems in the subtropics of northern Australia: a modelling approach

Abstract

Beef producers have to determine the best allocation of a limited resource of high-quality forage. This analysis assessed the most profitable way of incorporating high-quality forages into the whole-of-life steer growth path on forage systems in central Queensland, using property-level, regionally relevant herd models that determine whole-of-business productivity and profitability over a 30-year investment period. Twenty-two growth paths (liveweight change over time) from weaning to marketing were investigated for steers grazing buffel grass (Cenchrus ciliaris) pastures with and without access to leucaena–grass pastures (Leucaena leucocephala spp. glabrata + perennial, tropical grass (C4) species) or forage oats (Avena sativa) for varying intervals throughout their growth path. The production, economic and financial effect of each growth path was assessed by comparison to a base scenario that produced finished, slaughter steers (605 kg) from buffel grass pastures. The relative profitability of marketing steers at feedlot entry (feed-on) weight (474 kg) instead of slaughter weights was also assessed. The growth paths were applied within two beef enterprises, namely (1) steer turnover and (2) breeding and finishing. For both enterprises, grazing steers on leucaena-grass pastures from weaning until they achieved feedlot entry weight (474 kg) was substantially more profitable than any other growth path. Compared with the base scenario, this optimal growth path improved profitability by 121% and 37% for the steer turnover and the breeding and finishing enterprises respectively. The purchase of additional breeders for the latter enterprise was required to optimise utilisation of the leucaena–grass pastures immediately. Incorporating leucaena–grass pastures at any steer age improved the profitability of the steer turnover enterprise (AU$7368–AU$106508 extra profit/annum), and similarly for the breeding and finishing enterprise (AU$1754–AU$31383 extra profit/annum) except for two scenarios where leucaena–grass pastures were provided to older steers targeted at the feed-on market (AU$4816 and AU$23886 less profit/annum). However, incorporation of leucaena–grass into steer growth paths also resulted in increased peak deficit levels and financial risk to the business compared with buffel grass-only production systems, with payback periods for the most profitable growth path of 8 and 14 years for the steer turnover and the breeding and finishing enterprise respectively. All growth paths that incorporated forage oats and leucaena–grass resulted in lower economic and financial performance than did comparable growth paths that incorporated leucaena–grass only. Furthermore, incorporating oats into buffel grass-only growth paths always reduced the enterprise profitability. There was no relationship, across scenarios within an enterprise, between change in profit and the number of extra weaners produced or the amount of extra beef produced per hectare.

Achieving drought resilience in the grazing lands of northern Australia: preparing, responding and recovering

“…Our findings, both here and in other studies (e.g. Bowen and Chudleigh 2019), are in accord with these authors who also identified that capital constraints and perceived risk were likely to be important factors influencing the adoption of alternative management strategies and technologies by livestock producers across Australia. Diversifying sources of income can have the effect of both smoothing income over time and improving average profitability which, consequently, can reduce risks from climate variability and assist with drought preparedness and resilience (Buxton and Stafford Smith 1996;Freebairn 2019).…”

Abstracts from the Proceedings of the 33rd Biennial Conference of the Australian Association of Animal Sciences

“…Leucaena leucocephala is a tropical leguminous tree that is planted in rows with improved grass species for beef cattle fodder. In central Queensland, leucaena-grass pastures substantially increase beef production and profitability compared with perennial grass pastures as they support higher stocking rates, longer grazing periods, and higher daily cattle liveweight gain due to increased diet quality (Bowen et al 2018). However, there is little data documenting diet selection of cattle grazing leucaena-grass pastures over different seasonal conditions with varying forage availability.…”

“…Leucaena leucocephala is a legume fodder crop that grows in tropical and subtropical environments. Leucaena provides a high quality feed for cattle boosting liveweight gain both per animal and per hectare, improving profitability for steer turnover by 121% compared with the base scenario of grazing buffel grass (Bowen and Chudleigh 2018). A number of commercial leucaena cultivars, Cunningham, Peru, Taramba, El Salvadore, and Wondergraze, are used in Queensland.…”

Adoption, profitability and future of leucaena feeding systems in Australia

“…This system has the potential to fill the winter feed gap to maintain high weight gains for close to 12 months of the year, compared with only 7-9 months without winter forages. While field research into the productive capacity and resulting economic outcomes of such systems needs to be undertaken, economic analysis of a system, involving grazing cattle on oats in the winter months and leucaena-grass pasture for the remainder of the year in central Queensland (Bowen and Chudleigh 2018b), indicates costs of establishing and managing the winter forage could out-weigh the increased weight gains and additional income potential from marketing heavy cattle earlier. Without irrigation, such a system may have production merits only in higher rainfall years.…”

“…The long-term economic benefits of perennial pasture grazing systems with leucaena are also substantial, even when the high cost of establishment is included. Gross margins per hectare can be doubled (Bowen et al 2018) compared with grass-only pastures, and whole-farm profitability (annualized net present value) for a breeding and finishing enterprise containing around 1,500 adult equivalents (AE = 450 kg dry animal at maintenance) can be improved by more than $40,000/annum for 30 years when compared with the same grazing business without leucaena (Bowen and Chudleigh 2018a;2018b).…”