Introduction by Patrick Francis

It was interesting to read Michael Lyons, Nuffield Australia scholarship report “Working with nature for sustainable profits”. Despite the fact it is written about northern Australia beef cattle farming using Bos indicus breeds, I consider many of the principles raised about livestock selection, grazing management and business diversification are relevant across all broadacre livestock businesses including sheepmeat farming.

The imperative of implementing strategies in northern beef production, so as to strengthen both profitability and the preservation of natural assets, has been highlighted by a new report from 2014 Nuffield Scholar, Michael Lyons.

Michael and wife, Michelle, manage well-known Charters Towers district property ‘Wambiana Station’ which has been held by the Lyons family for more than 100 years.  The enterprise now encompasses breeding and selling bulls, growing out steers and trading cattle along with hosting school and university students from Australia and overseas for educational camps.

It was Michael’s extensive and long-running observation of the northern cattle industry, and its struggle to achieve profitability over the past decade, that inspired him to seek global strategies to help restore strength to the sector through his scholarship, funded by Meat and Livestock Australia (MLA).

Michael said his commitment to ‘work with nature’ led him to further refine his investigation to exploring holistic business strategies applicable to the northern production region.

“Our family has owned Wambiana since 1912, so we have been the custodians of this land for over a century,” Michael said.

“It is a responsibility we take seriously and hence we believe it is important for our business to be both economically profitable and ecologically sustainable.

“Achieving profitability in the northern beef industry, in which we operate, has been challenging for many producers and where there is no profit there is usually also no sustainability – the land and pastures are over-utilised and the people in the business become over-worked.

“I was keen to look at what other people, from similar environments around the world were doing to work with nature for profitable futures.

“My report highlights the importance of looking at the environment, economics and people as a ‘whole’ as opposed to isolated ‘parts’ when making decisions for your family and grazing business.”

Specifically, Michael’s research investigated key drivers of ‘sustainable profits’ including:

• Selection of fertile, adapted cattle
• Optimising grazing management
• Breeding polled cattle
• Complementary enterprises.

This work took Michael to New Zealand, Mexico, Brazil, Argentina, Chile, the United States, the United Kingdom and the United Arab Emirates in search of graziers and farmers who are registering profits through the implementation of forward-thinking and innovative production techniques and decision making.

The experiences of these progressive primary producers lead him to develop a range of recommendations aimed at assisting northern producers in strategic planning to benefit both profits and the long-term resilience of their businesses. Source: Nuffield Australia

Find out more:

Michael’s full report is available on the Nuffield web site http://nuffield.com.au/scholar-profile-michael-lyons/

Working with nature to improve a grazing business’ profitability and environment

By Patrick Francis

Michael Lyons Nuffield Australia scholarship concentrated on four key topics. Three of these, livestock selection, grazing management and complementary enterprises contain principles which are just are relevant in southern Australia for sheep as well as cattle farming.

When considering Lyons report it is useful to know that he and his family have been involved in one of the country’s longest running beef cattle grazing management trials. The “Wambiana grazing trial” on the family station in north Queensland has produced some of the most highly scientifically scrutinised grazing management data so far collected anywhere in Australia.

It gives Lyons the background to provide astute assessments of the recommendations given to him by rangeland farmers in other countries during his Nuffield scholarship travel.

Figure 1: The Wambiana grazing trial has been running on the family property since the mid 1990’s.

Livestock selection criteria

While Lyons’ Nuffield Australia report related directly to beef cattle and in particular Bos indicus (tropically adapted) breeds, many of the selection criteria highlighted can also be related to meat sheep production.

One of the major restrictions commercial meat sheep farmers have compared  to cattle farmers is the perceived inability to connect ewes with progeny. This means that at best flock performance is based around averages without identifying the trait leader ewes and rams in a flock.

Cows and calves are easily matched using large ear tags and recording which animals are pairs. This matching can be done with ewes and lambs but takes a considerable amount of extra time and observation over a short time period (a new electronic tag called SmartShepherd has recently been manufactured. Its developers say it makes matching lambs with ewes practical and economical for commercial sheep farmers).

When accurate individual pedigree data is collected and recorded the rewards for flock performance can be significant. I consider many of the important selection criteria highlighted in Lyons report for cattle are just as relevant for sheep when progeny can be directly connected to their dam and sire.

Lyons spoke to a number of different farmers who take a holistic approach to livestock production. Here are some of their cattle selection perspectives which Lyons considered useful:

Johann Zietsman – Zimbabwe

Zietsman’s approach is that there is no universally superior genotype and that the environment should dictate the most profitable genotype, not man.

He seeks profitable production by selecting for:

• Cow efficiency.
• Calf maturity.
• Six-month maturity.
• Grass conversion efficiency.
• Body condition.
• Yearling maturity

He says faster progress for selecting adapted cattle can be achieved by limiting the number of traits under selection. Therefore, it is critical to ignore the unimportant traits and concentrate on the important traits. To this end, Zietsman focusses on:

• Grass conversion efficiency – the ability to convert grass into growth and good body condition.
• Hormonal balance – high levels of testosterone in bulls and oestrogen in heifers at a young age resulting in early sexual maturity.
• Optimum milk – a balance of producing enough milk to grow her calf to approximately 50% of her weight but not so much milk that it impacts her ability to fall pregnant again
• Easy-care – cattle that can efficiently convert grass into meat with minimum inputs

Zietsman also likes the following “easy care” traits:

• Calving ease.
• Tick resistance.
• Resistance to internal parasites.
• Mothering ability.
• Temperament.
• Polled cattle.

Kit Pharo – USA

Kit Pharo, the Principal of Pharo Cattle Company, manages their herd so that cows graze on short, native grass year-round, with very little feed supplement. Nature sorts out the “good ones” with no exceptions made for non-pregnant, late or dry cows. They must produce and wean a calf every year or they are culled.

Here is what he looks for in a cow:

• Moderate size – frame score of 2 to 4 with a mature weight of 450kg to 570kg, and the ability to wean a calf that is a high percentage of her own body weight.
• Easy-fleshing – a low-maintenance animal with the ability to maintain good body condition, even on limited feed resources.
• Volume & capacity – Large fermentation vat (rumen) with the ability to efficiently convert low quality forages into meat and milk.
• Structurally sound – Good feet, legs, teeth, muzzle, eyes, udder, hair coat, fly resistance, etc.

Optimal grazing management

The second major focus of Lyons Nuffield Scholarship was to find out what strategies are  “… useful for guiding management.” Once again I contend his strategies are just as applicable in southern Australia and for sheep flocks as well as cattle herds. This is what he concluded:

Match stocking rate to carrying capacity

There seems to be universal agreement that this is the key criteria in managing pastures. This strategy refers to reducing or increasing the number of cattle grazing to match the amount of grass available.

Overgrazing versus undergrazing

There are two ways to damage pastures – overgrazing and under-grazing. Often, there are examples of individual plants in both of these states within the same paddock.

Time control grazing

This term is used to cover all grazing systems that work on providing adequate rest for pastures to recover from grazing before grazing again. These systems vary in their intensity and capital requirements. However, all have the following commonalities:

• Give paddocks adequate rest before grazing again.
• Keep grazed periods short to restrict plants from being grazed twice during the grazing period.
• Use high stock density to eat the pasture or knock it down so that it can protect the soil surface and be recycled into the soil.

Number of Paddocks

Assuming some form of time control grazing is beneficial for incorporating rest into the grazing system, how many paddocks are required to achieve ecological change without compromising animal performance? David Pratt of Ranch Management Consultants in the USA has the following rule of thumb:

• 8-10 paddocks per mob stops overgrazing.
• 14-16 paddocks per mob supports good animal performance.
• >25 paddocks per mob are required for rapid range improvement.

The greater the number of paddocks, the shorter the grazing period and the longer the recovery period. A large number of cattle grazing an area for a short time allows them to utilise the available pasture and knock down the remaining pasture, thus improving contact with the soil surface and encouraging biological breakdown, mineral and energy cycling.

Beware of Rotational Grazing

It is easy to assume that, because animals move to new paddocks, that the pastures are getting healthier and there is some economic benefit. However, unless the moves are based on the rest period of the pasture, it may actually be rotationally overgrazing i.e. re-grazing the pastures before they have had a chance to recover.

Complementary enterprises

The third component of Lyons scholarship report which has wide application is how complementary enterprises can “…increase profitability and work with nature”.

“By definition, complementary enterprises should improve profitability by complementing the existing enterprises. They often make use of free inputs, for example, the waste of another enterprise within the business (referred to as “leakage”) or a resource that is not being utilised, to value add to their business. Turnover should be increased and overheads per unit of income decreased leading to greater profitability,” Lyons says.

He says complementary enterprises are generally added to a business in two ways:

• Vertical integration such as adding a seedstock herd, building a feedlot or direct marketing product.
• Diversification such as agritourism, contracting work.

He says “a farm “turnaround” specialist in the 1940’s, Howard Doane, believes it is better to vertically integrate one enterprise than to horizontally add more production enterprises, when the produce is sold conventionally. He indicates that the goal should be to get out of the commodity business, not to add more raw product commodities to your business”.

Whilst alternative income streams might seem alluring, David Pratt of Ranch Management Consultants (USA) warns “Our benchmarking results show that the most profitable ranches generally have two or three enterprises. Ranches with five or six enterprises are rarely profitable. Generally, the more enterprises someone has, the less profit they make and the more stress they feel” .

Lyons suggests when you consider diversification, ask three questions:

1. Are we creating a new business or just another job? Unless it is a business, do not do it. The last thing needed is another job.
2. Does it compete with or complement another enterprise? If it competes, it will not increase profit.
3. Can it produce significant income? Doing a lot of small things will be tiring, but it will not increase profit. Highly profitable businesses do just a few things, but do them in a big way.

Take home messages

Lyons contends very few elements in nature operate in a linear manner but rather operate in cycles that are dependent on other elements of nature.

“As a result, managers need to manage the whole of a business that includes the environment, the economics and the people. When these are managed well, they can build environmental, economic and human capital.

“There are no silver bullets or quick fixes in agriculture. Similarly, there is no “one-size-fits-all” solution. Growth comes from individuals applying the principles and developing novel solutions for their business and natural resources,” he says.

Finally Lyons’ report recommendations provide an excellent blue print for any livestock business to operate under or at the very least consider seriously. They are:

• Take a whole-of-system approach to profitability and sustainability. Plan the way forward and look for the synergies in the production system.
• Keep in mind the key drivers of profitability in Northern Australia – managing grazing and genetics well. View these like compound interest – the more reinvested, the greater the long-term returns. Good management of grazing will increase the vigour and biodiversity of pastures with each season. Good management of genetics will lead to each generation of the herd being better than the previous generation.
• Grazing animals have two roles – one is to produce a product to sell and the other is to improve the environment from which they graze.
• Develop strategies for selecting cattle that are adapted to the environment. Stick to a plan and the cattle that are suited will reproduce and thrive. Select replacements from these cattle. The cattle that are not adapted should be removed and allows moving a herd more quickly towards the wider goal.
• Find a level of grazing intensity that fits with goals. Do not let stocking rate exceed carrying capacity and plan to allow plants to recover after grazing. Starting more extensive than is needed may occur, but it’s a start.
• Consider increasing the proportion of polled cattle in the herd. Animal welfare, staff welfare and gross margin profitability trends support polled cattle.
• Look for opportunities to diversify. Consider the passions that could be incorporated into the business. Also look for “leakage” in the business – what resources are currently being underutilised or wasted in the business?
• Engage in training to build skills in new areas. Learn from others as changes are implemented. Be surrounded by positive people who are prepared to change.
• Do something. A rudder can’t give any direction to a boat without some motion. Similarly, in business, try a new idea and monitor the result. Other decisions to refine direction can always be made.