Get Your Signed Invoice Sample for Animal Science

Signed invoice sample for Animal science

so my topic today evaluating the consequences of alternative management strategies for the enterprises in northern Australia and I'd like to start by acknowledging my co-author on this work Fred Chudley whose principal economists also with the department of agriculture and fisheries Queensland I'd also like to acknowledge the many our beef R&D specialists across northern Australia primarily from the Queensland and Northern Territory government departments agriculture departments who we've worked with in this project and provided input and have been really critical members of our project team this work has been funded by the Queensland Government drought and climate adaptation program and the work I'm presenting today is just one aspect of a larger project of work and for those interested you can access that extra work from the links at the end of my presentation today so today I'll be following the usual format in my presentation I'll start with some background of the challenges faced by northern beef producers which frames research objectives a brief explanation of the methods we've used in this whole phone economic analysis a sample of some of the key results and a discussion of the key insights with regard to both the results themselves and the framework the economic framework we've used to conduct the analysis I'll finish with some conclusions of course and provide some links to our project outputs and reports at the end of the presentation so to start with the background we know that there are major challenges facing our beef businesses in northern Australia they face large intra annual indicator rainfall variability which in turn causes great variability in production and also in profitability from year to year quite separate to that often we have they're experiencing variability and commodity prices decline in terms of trade and an ongoing disconnect between the asset values and by that we mean property values largely and the returns that producers can make from from that asset so therefore to remain viable and to build resilience these if businesses need to regularly produce a profit and bill capital and when they're looking at ways to improve their profitability they have to determine how they incorporate new technologies new management strategies into their business and whether or not those technologies and strategies will add value in terms of improving health and profitability so that leads us to our research objective in this project was which was to demonstrate the value of an appropriate framework to assess alternative management strategies and new technologies for beef businesses in northern Australia specifically so the question we were asking was what other strategies or new technologies most likely to improve profitability and resilience of beef businesses in northern Australia so in this project we tested a large number of strategies across various regions in the north and we could categorize these broadly into four groups so strategies which might improve overall herd biological performance or enterprise profitability so targeting the whole herd the whole business strategies which targeted to improving breeder reproductive performance those that specifically target steer growth rates and also market alternatives and I've put a few examples on this slide but we looked at a much larger range of strategies and these were specific or tailored to each region that we worked worked in across northern Australia and I'll be presenting results for just a selection of these strategies in my presentation today so this table is just intended to give you an idea of the range of strategies we looked at this is an example for the central Queensland region and it's not intended for you to read these results but just to give an idea of the breadth of strategies we looked at for each region and what we are wanting to do within a region was identify which strategies may improve overall business profitability which strategies may make little difference and which could potentially send you broke over time and they are the red lines that go all the way across on these tables and I should point out that most of these strategies were suggested as positive changes by the teams that we're working with to develop up these strategies and positive in terms of producing a non production benefit or non-biological benefit another way to frame the relevance of this work to beef producers or the relevance of these results is is that you can you can look at these results in terms of if you have limited capital to invest in your business where should your best investor if you're looking to improve profitability so in this work we used whole firm economic modeling and this involved a combination of rigorous science and a whole firm perspectives so we needed a really clear understanding of the wholesome and the likely response to any change due to a management strategy or technology so to do that we needed to work with interdisciplinary teams and we needed to consider a whole range of various disciplines so soil science agronomy animal science engineering agricultural economics managing marketing politics sociology and their associated sub disciplines were relevant so we needed to bring in a large group of people to work with us on on this project economics was the core and integrating discipline and I'd like to highlight that this same whole firm approach is relevant to any production system or property anywhere not just to these northern beef enterprises we were looking at in this project so this modeling was a property level analysis a whole farm analysis and we were conducting partial discounted cash flow budgets so a marginal analysis we're estimating the extra return on the extra capital that we've invested to implement a new technology or to make a management change we used the bread cow and dynamic herb budgeting software which was developed by our Queensland departmental AG economists over many years the most recent version was released and published in 2017 so in this whole firm economic modeling we developed our representative beef properties for each of the regions in the north of so these were example constructed properties we spent a lot of time developing up assumptions for these properties so that the properties would sit sensibly within each of the regions and we derive these assumptions from wherever data was available good research data industry surveys and also the expert opinion of these experienced staff dpi personnel and industry experts as as well and then for each of these representative enterprises we then evaluated the effects of these alternative management strategies and technologies on the production and the economic performance of the cattle enterprises over a 30-year time period so in developing up our assumptions we needed to form long term expectations that take variability into account of particular year-to-year climate variability and so this framed our thinking in terms of forming long term estimates about the biological performance of our based cattle herds in terms of mortality reproduction growth paths and also cattle prices of course so we used historical price data over the last six and a half to 11 years depending on the region and the markets that were relevant and we use those to derive our expected cattle prices that we used over this thirty-year analysis we to date our project has looked at six regions across northern Australia but in this presentation or focus on examples from four disparate regions to give an example across a range of production environments so I'll present results for central Queensland here in the in the relatively more productive region of the north also the Northern Downs region of Queensland the northern Gulf appear in in the more monsoonal mobile productivity environment and the Catharine region as well so provide just a brief background to these representative enterprises across each of these four regions our central Queensland property is based here in the subtropics and as I've said this region's a relatively productive region of the North the northern Downs property is in a semi-arid climate here and our northern Gulf and Catharine regions and monsoonal climates up in this part of the world now when we're looking from left to right across across this table in terms of the region's we're moving from a relatively higher productivity to lower productivity and smaller more intensive to larger more extensive in properties and beef production systems as we move across that table now phosphorous status is really important issue across the North so I just wanted to highlight that these particular representative properties that we derived for CQ and northern Downs were considered to be adequate for phosphorous and northern Gulf property was considered to have a deficient sauce forest status but our base herd was adequately supplemented for sorceress so that was our starting point in the Gulf whereas for our Katherine bass heard that was an acutely deficient land type that the heard wasn't currently receiving adequate phosphorus supplementation so that's a really important point to mention so as I've already mentioned we're moving from a smaller property size to larger property size as we move across this table and corresponding herd sizes when we're thinking about the herd we have a controlled mated herds in central Queensland the northern downs with one main winning and the more extensive environments of the Gulf and the Katherine region we have continuously made it herds in our base properties with two main weaning rounds our winning rate ranged from 78 percent in the long term value in central Queensland down to 54 percent in Katherine and herd mortality ranged from around two to four and a half percent in the Katherine region in terms of our stare live weight gains our long-term expectations for each of these regions just to put things in context for our audience these are post meaning annual live weight gains those ranged from 180 in central Queensland down to 90 in the Katherine region and we're targeting feed on or feedlot entry steer markets was our main target market for the base herd in central Queensland and the Northern Downs where as live export was our key steer target markets for the northern Gulf and Katherine regions so that's just providing some context of those base enterprises in each of the four regions I'll talk about today in presenting the results I'll focus on some key economic metrics up here which I just like to take a moment to explain and and just to remind the audience that we looked at a whole range of strategies for each region I'll just present a selection today the work these strategies that I've selected to present to you are those that really show range in the outcomes that we got so those that produce the most positives returns and those that produce the most negatives and as well I'll present some of the scenarios where the results have really challenged our thinking and challenged our paradigms and made us reframe our thoughts about what are the some of some of the strategies we should be focusing on in the north so as as I've already stated we conducted a marginal analysis so that's considering the extra costs and extra benefits and the results in this first column indicative of the extra profit per year to the business as a result of implementing these strategies or technologies so this is a net present value it's the net returns over the life of the investment and it's converted to an amortized or average annual value over the 30 years so these results are the extra profit per year every year over 30 years of the analysis we've also have results for peak deficit in cash flow course by implementing the investment and the payback period the number of years before the investment pays back and these two pieces of data are really important in indicating the riskiness of these management strategies or technologies and the final row of data is the internal rate of return so the rate of return on the additional capital invested in the business to make that management shown solstar with central queensland results a snapshot of those results and here I'll present just five results for five scenarios out of a total of 35 that we looked at in this region and to provide some context it's useful to bear in mind that our base herd or property here in central Queensland produced a net profit per annum around $100,000 per annum so any profit or any change in our profit is adding or subtracting from that net profit per annum it's to put things in context so in central Queensland the most profitable strategy of all that we looked at was establishing Makena which is a tree perennial legumes in two perennial grass pastures and in this particular strategy we establish sufficient Lupino to feed all stairs from winning to feed on a feedlot entry weight so that added a substantial amount of extra profit per years around forty six thousand dollars per year on average each year over 30 years but a substantial peak deficit and a fairly lengthy payback period which need to be considered a strategy of interest in that it produced fairly negligible change to our annual profit of the property was this strategy of genetic improvement of winning rates so this is is purchasing bulls with better genetics that can improve the winning rate of breeders in the herd by six percentage basis points so that made very little difference to our base profit based herd net profit in all of our regions as for central Queensland we had a large or substantial number of strategies that and strategies that have been previously favored where we know we can get a production response a really good biological response but the cost of achieving that response is greater than the benefits at the whole farm level so at the whole farm level we're reducing our profitability despite getting those sometimes really good production responses and examples for Central Queensland here you are supplementing first calf heifers lactating heifers to improve our reck inception rates and annual forage cropping so this example is for forage oats and providing that just years to to get them to feed on weight having a substantial negative impact on our whole farm profitability the final example I have here for central Queensland is an example of targeting a specific market and Wagyu beef is of interest to many producers in CQ and in other areas in this particular example we were looking at converting our boss indicas crossbred herd to one that produces Wagyu beef and we looked at many a number of sub scenarios within this but this particular example is when we looked at where we we assume that that 100% price premium again reducing from year 10 of the analysis so and and we know that this is a 30-year analysis so we looked at a number of these sub scenarios where we looked at whether or not the price premium reduced and and how long after the start of our analysis or the start of that change over the way he'd be fed reduced so if we made this assumption that the christ' premium began reducing from year 10 we this strategy had a substantial negative effect so it reduced our the profitability of our business by around 42,000 dollars per year over 30 years so we'll move on now to snapshot of results for the northern Downs so the northern downs us here in this semi-arid environment in Queensland it's a phosphorus adequate environment I'll present here five examples out of a total of 39 that we looked at for this region and just to provide some context the bass herd net profit per annum was a hundred and eighty four thousand dollars in this region so the most profitable strategy in this region was one where we looked at converting our breeding herd across to just a steer turnover or trading enterprise and and this produced a substantial positive results so 62 thousand dollars extra profit per year over 30 years from implementing this strategy and I should say that this would produce a positive outcome in any of the regions we looked at we were particularly interested in looking at this strategy in the northern Downs region because in the northern Downs we have very large seasonal variation in rainfall and frequent droughts and and a conversion to a steer turnover or trading operation is often suggested as a more flexible way to manage the seasonal variability in this environment it's it's easier to offload cattle and then bring cattle back on so so that is that's why we're interested in that and it did produce an improvement in the profitability of the business but of course there was we need to bear in mind that this is a more risky strategy there's price risk involved in trading large numbers of cattle and there's also a fairly substantial pig deficit and payback period involved in moving from a breeding a breeder herd to a steer turnover enterprise so that that needs to be considered and looking at this strategy I've included an example of using hormonal growth promotants for steers for this region and we looked at HTTPS in a number of our other regions as well and this is interesting and that it really highlights the importance of the price margin and price premium for these markets so we looked at two sub scenarios within this we looked at the situation where we received the same price for our steers so we're selling them at the same time but a heavier weight and in this in that instance HTTPS at around nine and a half thousand dollars per year to the business over 30 years but should we receive a ten cents per kilogram price penalty for those steers so selling at them at the same time and and weight or same age and weight as in the previous scenario then we see a reduction in profitability so this really highlights the sensitivity to price premium the final two examples I wanted to show for the northern Downs region examples of where we modify the base property to look at specific issues for a region and we did this for for all of our regions where wanted to look at an issue that perhaps wasn't considered representative enough to be included in a representative property but was a really important issue for that region we wanted to examine so in this instance here we wanted to look at this issue of prickly acacia a control and prickly acacia is for those who don't know it's an exotic woody weird it's very invasive and it's a big issue in that northern Downs area so our representative based property that we compared all of our other strategies to had minimal prickly acacia infestation but we wanted to look at a property that had a fairly substantial quickly okay shear issue and in this instance about 80 percent of the property having some level of prickly acacia infestation we wanted to look at property level control in the first instance and then maintenance of that over 30 years and and if that were done the analysis indicated we could add substantially to our base herd net profits around one hundred and twenty nine thousand dollars per year every year over 30 years but really large peak deficits to achieve that and long payback periods indicating that that's unlikely to be a feasible option would beyond the capacity of most property managers to do that and they need to look at a staged approach to control which is what we did in some subset REO analysis as well to tackle torture to investigate this issue the second example here of where we modified the base property to look at an issue or demonstrate an issue was this issue of selecting the optimal age of turn offs of our steers so the optimal sale age now our base in all of our based properties we selected the optimal age of turnoff as our base and we can identify that very readily you know economic herd models and in this instance for the northern downs that optimal sale age was 31 months but we know that right across northern Australia as well as in the northern downs there are lots of beef producers who target a wiener turnoff age and we know that that's the least profitable age of turnoff that producers can salute but that producers often get caught in what we call the Wiener trap where they're trapped in that that Wiener production and you can see here that if we look at moving our business from a Wiener turn off target to the optimal of 31 months we can add around seventy one thousand dollars per annum over thirty years to our whole property profits so that's quite substantial however there's quite a substantial peak deficit and payback period of two years here which can be difficult for some property managers or some businesses to overcome and that's what keeps people in this Wiener trap so moving on now to our northern Gulf property up here in the lower a relatively low productivity area of Queensland in this region we actually had a negative base herd net profit per annum of negative twenty three and a half thousand dollars per annum and so of course we're really interested for this region to find some strategies that could improve that profitability and ideally make the business of profitable business I present six out of a total of 25 strategies that we looked at for this region scenarios and in terms of the most profitable interventions for this region the standouts were establishing the perennial legumes stylo into pastures and and home bread balls so the in the stylos scenario in this example we looked at establishing just 500 hectares in the in this instance for stairs and doing that added around $17,000 profit per year over 30 years but with a peak deficit here that's fairly substantial a payback period of nine years also we had a profitable outcome from this scenario of home bread balls and by this we mean that the the managers or the business invest some substantial time an objective selection of their own balls from the herd and in doing that objectively so that the box performance of the herd has not changed over time and so instead of buying in balls so this strategy added around $16,000 profit per year to the business had a much smaller pig deficit than the Stoller scenario and a much reduced payback period we've also looked at genetic improvement of winning rate and we did that in it you know all regions but in this particular region that out of around six thousand eight hundred dollars to the bottom line and as mentioned previously this involved buying bulls with better genetics that could improve the winning rate of breeders by around or by six percentage basis points and again in this region as for others we had a number of strategies that we know will produce a positive production response to reduce the overall profitability of the business and so some examples that I've presented here include supplementing first carp heifers lactating heavens to improve their reck inception rate while providing a molasses production mix for the steer tail so in the northern Gulf as in the Catharine region where we have continuously mated herds and to fill winning rounds we have a cohort of stairs which is lower live weight and not able to meet market targets and so this is what we call the stair tail retargeting with these production supplements and we also looked at a strategy here of growing sufficient storage sorghum silage to feed all stairs which also had a fairly substantial negative impact on the business so the final region I look at in my presentation today it's a Katherine region of the Northern Territory so again a fairly low productivity region and much more extensive and region and very large property sizes and a base herd net profit per annum in this for this property of 673 thousand dollars per annum present five out of 43 total scenarios that we looked at for this region and the most profitable of all for this region was phosphorus moment ation of the entire herd in this region so just to remind the audience this is an acutely phosphorus deficient based property and it was uncertain about herb was unsub lamented and we implemented effective or sufficient phosphorus supplementation for the entire herd so this added substantial extra profit per year so around three hundred thirty two thousand dollars per year over thirty years to the base property very high internal rates of return because we're implementing we're getting that benefit every year and we're getting that benefit fairly immediately fairly short payback period but still fairly substantial peak deficits to get there the next most profitable strategy in this region was again establishing these styloid pastures for stairs and though being a perennial shrub II beg you for those not familiar in this instance we looked at establishing sufficient stylo for all the stairs and that added substantially to to the the profitability of the business again we looked at home bread balls in this region so objectively selecting Bulls from within your own herd rather than purchasing balls and this also added fairly substantially to the profitability of the business and with a much lower peak deficit and much reduced payback period compared to say style owes for stairs again in this region we had examples where our product our strategies that can produce a production response just don't don't result in a profitable outcome for our business so the example here was concentrate feeding the stair tail again and supplementing our first car feathers to improve their reconceptualize having a fairly substantial negative effect on whole phone profitability so I'll move on now to summarizing some of our key insights from this work and and this will cover two aspects firstly key insights about the strategies themselves and then also our insights or learnings about using this whole farm economics framework that we have used in this study so starting with our key insights about the strategies themselves importantly in each region we were able to identify strategies that could substantially improve the profitability of that base profiting property so that was really important and encouraging however we identified many strategies that had a negligible effect on annual enterprise profit and by that we're talking really plus or minus five thousand dollars per annum so which really is within the bounds of error in the analysis and we also identified many strategies as have highlighted that had a negative effect on wholesome profit and that was despite a positive production response that we know we can achieve so addressing a P deficiency and introducing our perennial legumes they were consistently profitable strategies across northern Australia and we've looked at other regions other than those four I've identified that they were consistently profitable strategy where relevant so where we had a P deficiency and we're printing on ligands were available but were adapted and suited these were two clear winners in terms of improving profitability for beef producers however that we also had strategies that were quite consistent in reducing profitability for the businesses across northern Australia and these were production feedings and lasses silage brain or annual forage crops as well so forage oats sorghum and lablab when we looked at strategies to improve the reproductive performance of breeders and the examples I've presented here a genetic improvement of weaning rates supplementing first cup heifers we also looked at strategies to reduce fetal calf loss and some others we found small positive to large negative effects and enterprise profitability from making these sorts of interventions and so this really emphasized to us and to our teens the critical importance of implementing low-cost strategies to improve profitability so paying attention to breeder body condition score and optimizing herd structure so identifying that optimal steer sale age and optimal cow cull age and I should also mention that addressing these issues helps to minimize drought risk as well and that's a really important issue that we've looked at in other parts of our project now the results indicated that the low risk production systems were really low returned production systems and that for producers to improve their property profitability and get better returns they really need a capacity to manage risk because most strategies that will allow you to improve profit are also likely to increase the complexity and the riskiness of our beef production systems a good example of that is property level control of the exotic what do you eat prickly acacia to do that or doing that could result in a 13 percent internal rate of return but require more than 1.3 million dollars to be invested over the first four years of treatment and compared to a base property net profit for that creepy acacia are infested property of one hundred and sixty nine thousand dollars per annum that's that sort of investment is going to be beyond the capacity of that business so in identifying some of these issues were then able to look at sub scenarios of house how some of these profitable strategies might be implemented and often it's a staged approach and so we've looked at various sub scenarios within these analyses to address just some of these issues so improving returns requires intensification that was a key finding of our work and we know that increase is as demands on manager skills and increases income volatility and risk often but certainly increases demand on manager skills so it's really important that's considered when we're looking at some of these strategies so good examples of that of some of these profitable strategies that require intensification alakina stylos moving from a breeding operation to a steer turnover trading operation and also breeding your own balls all of these require increased demands and our manager skills another interesting point from our our work on our results was that in flexible production system so strategies that reduce the flexibility of a business were generally more risky and less resilient and examples of that where strategies that affected market access or really targeted into alternative markets so like the organic beef or Wagyu markets or or using HTTP so that was an interesting point as well but really the key point for us when we're thinking about all of this work was that it's obvious that there are numerous alternative management strategies and new technologies they're arriving at an increasing rate for our beef producers and the challenge for them and for us and R&D specialist is to identify the ones that make the beef production system more efficient and more profitable and resilient and it became really evident to to out to our teams as we're working through these that analyzing or focusing in on one strategy in isolation it doesn't identify the relative benefits to other strategies other possible strategy strategies for that region and that's important so we really need to look at all relevant strategies for a region and compare them and also compare back to the performance of the current system to see whether we're really making a benefit for that beef business by focusing in on on one of our our favorite strategies oh I'll conclude by making a few comments about our key insights into using this whole firm economics approach this decision-making framework that we've used in this project key learning for us was that the implementation or development phase of implementing strategies and technologies is critical not not only to the answer that we get the result we get from our analysis but also to risk assessment and unlikely adoption by producers so it's really important that's considered but it's often overlooked in analyses and in particular the benchmarking type analyses that have a historical steady state before and after approach and they ignore the development process the time value of money and risk and so not only can they produce a different result or answer or ranking in terms of of strategies they can also produce misleading information and of limited value in terms of decision making we concluded that the representative farms approach that we used in this this work can be a powerful and highly useful tool for analytical purposes but they must be properly constructed and targeted and we we found that it's really important to put in sufficient time and engage the right people to make sure those representative farms probably represent reflect the region and the target audience and in doing this this work an important point or learning for us was that farm management economics is complex and the language that's in terms that are used are new to people and sometimes difficult to understand and so we needed to take time to properly explain explain the process and methods and the results to industry and to add to the teams that we're working with so that was really important we did find that the concepts and the language of this whole farm economics approach is much clearer at a beef produced some managers and it is to scientists and extension teams because they're thinking in that whole whole firm context key pointing in when we're thinking about technology adoption it's it's really really obvious to us that these these production systems they are human systems they're really complex dynamic diverse systems and they operate in a really volatile environment so to achieve adoption of strategies that we believe more favorable and will have a really positive result for producers we really need to consider as world and goals capacities and the resources of managers in our technology adoption from an extension of of our of our research importantly as well we've found that conducting individualized economic analysis analyses for specific businesses is a very powerful extension tool and and gives the most useful results in terms of technology adoption and we're fortunate in the department to has a number of agricultural economists who are able to conduct one-on-one work with producers and we've done lots of that as part of this project and as part of separate projects and we've found this a really powerful way it's producers to put put in their own figures their own assumptions it's targeted specifically to them and to see that results in their own business is a very powerful tool in terms of giving someone the confidence to make a change within their business in terms of guiding research focus we have found that this whole firm thinking has been really valuable for us in terms of building an understanding of the interactions and independence these responses of the whole farm level and and that we we see that as being able to produce the most useful outcomes in terms of identifying where we should focus our efforts in terms of research and extension so some final concluding points on this slide and and these are thinking about the outputs or in terms of the outputs from this project where we've used this whole farm economics framework across the north working with producers as part of groups and individually and also with the R&D teams that have been a part of this project we've found that the results from this work have enabled decision maker instead of beef producers and research and extension staff to be well informed and to make sound judgments about the technological change and writing results of that change but critical to this process we believe in is this role of of team learning and building a shared understanding of these complex and dynamic beef production systems so that process we believe has been critical to the success and the outcomes of our our project so I'll just finish by letting the audience know that all of our reports with the whole range of strategies and detail about all the assumptions that we've used are available from our project page on future beef we've got three regional reports available from this project phase page so far so CQ central West and the northern Gulf we've got three more reports underway and Northern Downs report will soon be available from the web page we've also got 13 recorded presentations that you can access from this webpage as well where we explain some of these results and and discuss them and also explain how to use the spreadsheet tools that we've made available from this page as well that have got examples in our free scientific publications that you can access from this page as well and and our Katherine results are also available from the deaf website but from a different location