A comparison of development options on a Northern Australian beef property

Abstract

A comparison of eight improved management technologies was made for a typical Northern Australian beef cattle property carrying about 3000 breeding cows located in the Katherine district of the Northern Territory. RANGEPACK HerdEcon, a computer package which links a dynamic herd model with farm enterprise costs, was used to progressively implement various property development strategies. These included combinations of cow and steer supplementation, and pasture improvement with Stylosanthes spp. Over a 20-year period the predicted accumulated cash surplus for the superior cow herd supplementation, cow and steer herd supplementation, and pasture improvement options were $0·66m, $1·12m and $1·32m respectively. After real interest rates of 6% were charged on borrowed capital and company taxation was levied, however, the 20-year net surpluses were $0·40m, $0·66m and $0·35m respectively. Annual turnoff rates were 24, 21 and 19% of herd numbers, but 33, 37 and 36% of herd value respectively. These figures compare to an expected 20-year loss of $1·40m for an undeveloped property in the same area, with a turnoff rate of 14% of herd numbers, and 17% of herd value. Successful pasture improvement can result in a productive enterprise, but there are major capital investment costs during implementation, as well as risks of pasture failure. As a result, supplementation strategies are more attractive, because they require less capital investment, and can be suspended in difficult circumstances. However, supplementation without good land management can cause pasture and landscape degradation. Because the beef industry in Northern Australia will continue to rely mainly on native pastures, research and development should reorientate to emphasise the long-term maintenance of native pastures, rather than their replacement. This study shows the advantages of a whole property approach to research and development, and the usefulness of a dynamic model to investigate the implementation phase of a new technology.