Making More from Sheep Australian Wool Innovation Limited Meat & Livestock Australia
MODULE 12: Efficient Pastoral Production
Procedure 12.3
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Background
information

With modern business constraints at play, agricultural businesses are continually being pressured to improve the efficiency of their operation. Pastoral businesses are particularly given to a need to devise efficient ways of performing management operations.

“Just as energy is the basis of life itself, and ideas the source of innovation, so is innovation the vital spark of all human change, improvement and progress.” Ted Levitt 1925-2006.

At a Glance
pt Benchmark your business against others of similar nature – know key benchmarks and set goals to achieve these if you are not yet achieving them
pt Evaluate where labour savings can be made in your operation to improve efficiency
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Key decisions, critical actions and benchmarks

Pastoral properties are generally large in size and long distances are regularly travelled to achieve effective property and livestock management. Such operations are often characterised by limited labour resources. Routine activities, such as water runs, can add significant time and fuel costs to the pastoral operation. Labour-hungry activities, such as mustering for shearing and crutching, are also substantial contributors to enterprise costs.

There are a number of approaches that have evolved, or been developed to aid in improving the efficiency of day-to-day operations. Some of these are unique to a particular operation, or type of operation, however many have been adopted throughout the entire pastoral industry. These approaches include the use of equipment, technology, infrastructure, labour, and management options that contribute to more efficient and effective livestock management and performance.

There are four ‘must-do’ procedures, which form a process for allowing you to make way for efficiencies in your operation:

  • Assess current production and handling systems
  • Review innovation across the industry
  • Determine where greatest opportunities are to benefit from innovation and efficiencies
  • Decide on ways to incorporate efficiency and innovation into the system.

Assess current production and handling systems

Do you know what industry best practice is? What are the benchmarks for production systems in your area? How are the more successful producers achieving their levels of success? Are there ideas you can adapt to your operation?

These are some questions you can ask yourself when considering your production system and how it is performing:

  • Could you be targeting a different market for your young stock, which may enable higher numbers of breeders?
  • Could you introduce another enterprise which might increase enterprise flexibility – whereby you can exit it once seasonal trigger points are reached?
  • Are there smarter ways of doing certain things in your operation?

Some common benchmarking examples:

  • Gross income per DSE
  • DSE managed per labour unit
  • Gross income per labour unit
  • Return on investment %
  • $ income from wool ($/head)
  • $ income from meat ($/head)
  • $ income from surplus sheep sales
  • Split of wool:meat ratio.

Management calendar

How does your management calendar look?

Do you have a management calendar?

A management calendar is a dynamic resource, which outlines key management dates, timings and things which are for the most part key operations for the business. They are usually marked on a calendar, wall planner or a planning tool on a computer.

Management calendars document key operations, as well as personnel required to perform these operations, and provide the opportunity to easily see where any opportunities for undertaking improvement activities when they fit into the program.

Take the time to regularly review your management calendar, irrespective of how many people are involved with the running of the business. Check it for areas of overlap that exist, which may place stress on your labour units, or other key deadlines, such as administrative deadlines.

Do this in a formal way – use tool 12.5 to formalise the process and include all members of the business in the process as they may see stress points that you may not.

Sheep productivity

Have you ever wondered about the following:

  • How well do your sheep stack up by industry standards?
  • Are they well suited to your environment, management style, and markets that exist in your area?
  • Are they a profitable flock in the majority of years?
  • Could they improve with better management or genetics?
  • What is the district average (long term) for weaning rates of lambs?
  • Do you pregnancy scan your ewes?
  • Do you know where the weak points are in your ewe management?

Ask yourself these questions, and attempt to answer them with as much data and fact as part of the process as possible.

Maintaining an objective approach to your sheep performance and focusing on processes within that enterprise, as a means of producing a product(s), will assist you in undertaking a more critical assessment of your management and genetics of your enterprise.

Equipment

Having suitable equipment is essential for smooth running of any operation, and sheep management is no exception. Many inventions have changed the way pastoral sheep production is conducted and enabled significant efficiencies to be made.

Crutching trailers can dramatically reduce the time and labour costs required for mustering sheep for crutching through reductions in mustering distance and time.

Developing purpose-built areas for holding sheep whilst drought containment or production feeding assists with labour efficiency and animal production, whilst maintaining groundcover in dry times. These facilities are not widespread throughout the pastoral areas of Australia.

Supplementary feeding, although not widespread throughout pastoral areas due to economics, can be greatly assisted by using:

  • Feed out trailers; there are options for self-weighing trailers which allow accurate amounts to be fed out
  • Paddock self-feeders
  • Utilising or constructing containment areas for drought management close to where storage facilities are located.

These options allow you to manage your resources in the most efficient manner possible, whilst also optimising the productive capacity of your sheep.

Precision sheep management – utilising Radio Frequency Identification (RFID)electronic ear tags – is a technology which is growing in prevalence in the sheep industry.

RFID ear tags assist the recording of individual animal information. These records can then be used for developing more detailed decision making processes, or facilitating management ease. For example, walk-over weighing systems can be used to record the weight of individual animals crossing over a weigh platform. This allows the monitoring of bodyweights and also can be used to determine weight categories for stock sales. These systems have been used in pastoral areas to monitor stock weights, and plan selling of livestock.

An auto-drafter allows animals to be automatically drafted into determined weight classes. This significantly reduces the labour requirements and errors when selecting sale stock. It reduces operator fatigue and removes the risk of the draft gate operator being injured by jumping sheep.

Compare your business performance against industry benchmarks

Working dogs

Man’s best friend can be a significant asset to efficient pastoral production. The presence of a team of good working dogs can easily account for the wages of employees with the work that they can perform. With labour shortages which often exist in agriculture, it is essential to have a competent team of working dogs for your operation.

Prices vary for dogs, and well trained dogs can easily recoup their purchase price in productivity and efficiency in mustering, or yard work.

Ensure that your working dogs are well cared for, kept in good health, and their vaccinations are kept up to date, and, importantly, you have sufficient numbers of dogs available to allow for rest during peak work periods, or if an injury occurs.

Signposts Signposts

View

Results of wether trials, for benchmarks on wool cut, quality, and performance.

Gross margin of key enterprises.
Look up: ‘gross margins’ on state department of primary industries websites.

Cost of production calculators
Lamb:
http://tools.mla.com.au/cop/

Sheep and wool:
www.makingmorefromsheep.com.au/plan-for-success/tool_1.13.htm

The use of electronic calendars – and other similar innovations using technology. Many computer programs and smart phones are compatible and can update calendars between nominated devices, thus keeping all in the loop and up to date.

Apps that are available for management calendars, and other recording opportunities.

Lambing planner: The WA DPIRD have a lambing planner available as both a hard copy and an app.

Attend

Learn more about: Lifetime ewe management courses and consider joining one.

  • Look up this web address for more information: www.wool.com/ltem
  • Contact: RIST to register for a course near you on (03) 5573 0956.

Working dog schoolsThere are many sources of training for owners of working dogs, and how to train them.

  • Contact your dog breeder, look up your breed association, or use your search engine for details of working dog training schools near you.

Read

Books on the topic of training and caring for working dogs. There are many others available.

Lithgow S (1991) Training and working dogs – for quiet confident control of stock. University of Queensland Press, ISBN: 0 70222 3948

Williams T (2007) Working Sheep Dogs – A practical guide to breeding, training and handling. Landlinks Press, Format: softback. ISBN: 9 48064 3093 Product Id: 2739



At a Glance
pt What’s going on around the industry which you could adapt to work in your operation to improve efficiency?
pt What are the successful operators doing that you could be doing to improve productivity or efficiency?
pt What management options are they using?
pt What infrastructure innovation are they using?
pt Are they using remote technology, and how does it perform for what is it being used for?
pt Are they doing some great natural resource management work?
pt Are there some innovations in non-pastoral areas that you could adapt to your area?
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Review innovation across the industry

Background information

Well maintained, and appropriate infrastructure, is paramount to an efficient operation. Pastoral properties have led the way with much innovation in the way of infrastructure, as a consequence of labour shortages that exist.

Having the right infrastructure in place, and keeping it well maintained, saves countless hours each year.

Many operations have praised the introduction of innovative methods of doing things, in their operation. These include:

Modifications to shearing sheds including: raised boards, changes to yard design – internal and external, loading ramps, self-mustering yards for managing both livestock and feral animal (goat) control, improvements to paddock gates, stock grids, development of raceways (laneways), water systems – telemetry systems to allow remote monitoring of tanks and troughs, pumping systems – solar pumps to provide pumping assurance and potentially a reduction in maintenance costs.

There are many options available to pastoralists, and being aware of what is out there and on the market can provide capacity to make significant gains in efficiency in your operation.

Management options

There are number of management options that can contribute to more effective management and potential labour and cost savings. Some examples are:

Three shearings in two years, depending on individual circumstances, can:

  • Remove the need for one crutching operation
  • Lead to an increase in wool harvested
  • Improve sheep growth rates
  • Spread marketing risk (three sale periods rather than two)
  • Maintain price (wool must still be combing length).

Bear in mind that shearing three times in two years does increase costs, as shearing is more expensive than crutching. Also, in a poor season, wool staple length may be insufficient, and incur heavy discounts. Be sure to do your homework regarding embarking on such a change, and consider costs and prices.

Telemetry systems and remote water management have been developed and tested for pastoral areas, with significant success and savings of labour in monitoring of watering points, in particular. The case study outlined below demonstrates the main issues in setting up of such a system.

Case study example

A Producer Demonstration Site project was undertaken in NSW in 2012 to test the potential of a telemetry system for a pastoral business.

The trial showed that:

  • Telemetry systems can create considerable savings in time and worry in relation to water management and monitoring
  • Telemetry systems are viable cost saving technology with a relatively short payback period on the capital invested
  • Phone alarms or text messages can be set to provide a warning of low water levels
  • A remote camera can be used to monitor stock accessing a water point(Gardner 2013).

Remotely monitoring production and land systems

Satellite imagery is becoming more readily available, and costs are reflected by this availability. In addition to property development maps, these images are being developed for such functions as seasonal monitoring.

An example of a project involving the use of remote monitoring is the Northern Gulf Resource Management Group, which is utilising spatial information systems to remotely monitor land condition, ground cover and pasture density. This assists their grazing management and seasonal decision making. This information and the software is accessed via a partnership developed with ESRI; a large commercial provider of mapping software.



At a Glance
pt Benchmarking your business against industry standards is a helpful way of gauging how your business is performing
pt You may need to engage a professional to help with this process
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Determine where greatest opportunities are to benefit from innovation and efficiencies

Background information

The obvious opportunity to bring about efficiency in your operation exists with saving in costs of production, or improved price for your product.

It is not always possible to make significant and direct change in these two areas of your enterprises, however, looking for areas to save time, combine activities, improve safety or add infrastructure to assist with operational tasks can have immense impact on efficiency of tasks.

Cost of production is an important benchmark which can highlight where efficiencies can be made within your enterprise. Utilise the tools which AWI and MLA have developed to assist with calculating these important benchmark figures for your business. Use tools 1.13 and 1.8 to assist with calculating your cost of production.

Once you have your cost of production calculated, compare it with the average sale price of your commodities, e.g. wool, meat. This will give you an immediate indication of the performance of your business.

Benchmarking your business performance is important in understanding and monitoring your business health. Use tool 1.9 to compare your business with indicative industry benchmarks.

The use of a partial budget can aid the decision making process of implementing a new technology or practice into your management. Use tool 1.11 to prepare a partial budget for a proposed change.

Combining activities to reduce labour costs and improve efficiency is an area where careful planning and time management can save significant amounts of time as well as other input costs, such as fuel.

Try to combine jobs so that one trip or activity covers more than one objective. This can be as simple as running waters with monitoring bait stations for feral animals. Try to situate baits in places where it is readily manageable to monitor and replenish regularly.

Try to combine jobs so that one trip or activity covers more than one objective. Group dog control activities may improve access to funding as well as being more effective through targeting a larger area at the same time.

Sheep performance is an area where opportunities often exist to improve efficiency of production, and boost performance.

Bear in mind the running costs of each and every ewe on your property is the same irrespective of her performance. By taking a little time to undertake activities which can fit easily within other operations (e.g. wet and drying at lamb marking), you can easily identify which ewes have not reared lambs and make decisions about the role of these animals in your flock into the future. Some producers have benchmarked wool cut in their flock and discovered that a large portion of their breeding ewes were not meeting their cost of production. While this sounds like a large undertaking, and may not necessarily be the benchmarking activity for you, it serves as a very good example of the importance of knowing costs of production, and identifying and dealing with poor performing animals in your flock.

Some key figures which you should know about your flock are:

  • Conception rate (foetuses scanned/number of ewes joined) – consider scanning if your lambing rates are not meeting local averages or better.
  • Failed to rear numbers (from wet and dry at marking)
  • Lamb marking (lambs marked/ewes joined)
  • Weaning rates (how many lambs make it to weaning)
  • Weaner mortality rates
  • Wool cut (kg/head)
  • Fleece value ($/head)
  • Cost of production per kg of wool or meat.

You may have others that you like to measure.

Diversification and innovation in your current operation

Are there opportunities for you to diversify your operation?

Are there further ways you can be innovative with your current operation?

Organic production is one method which has proved useful to some pastoral sheep operators, to boost productivity through access to organic markets and thus higher prices, in some cases.

Risk management

The very nature of sheep enterprises in pastoral areas of Australia sees risk management strategies built into the fabric of the business. However, it is still worthwhile keeping up to date on how others in your industry are managing risk. This may be through strategies such as insurance of livestock, or infrastructure to allow you to return to normal production after a serious event such as fire or flood. There are other insurance products on the market that may suit your business, depending on the risk factor and cost of insurance.

Risk may also be managed through early identification of trigger points, which will turn on strategies for reduction in stocking rate to allow maintenance of core breeding stock in tough times. Similarly, you may have a mob identified for quick sale in the event of poor seasonal conditions. Quite often the key to managing prices with seasonal risk lies in the timing of sale stock. Again, these decisions need to be made with sound information to hand and in consultation with professionals advising your business, such as stock agents, or agricultural consultants.

Signposts Signposts

Read

Mellors C, Morley N and Muster C (2009) Australian Pastoral Property Innovation Manual, Caring For Our Country and AWI. Download an order form here

Gardner, M (2013) Telemetry Systems PDS S1001 Final Report, Vanguard Business Services, 02 6885 1925

Peters, G (July 2012) Biannual shearing pays dividends, Farming Ahead

Wilkinson F and Vale M (March 2012) Production from shearing sheep once or twice a year, Ovine Observer

Ware S (ed) (Spring 2012) Western Division Newsletter, Edition 142, ISSN 0314 5352. http://www.dpi.nsw.gov.au/__data/assets/pdf_file/0007/442537/WDN-spring-2012.pdf

Going Organic: Organic Livestock Production in the rangelands of western NSW

Attend

Wean More Lambs and Lifetime Ewe Management are programs that have requirements for monitoring sheep at key parts of the reproductive cycle. This may include linking body condition scoring ewes with other operations, such as pregnancy scanning or crutching, and identifying ‘wet’ and ‘dry’ ewes at lamb marking or weaning.


Decide on ways to incorporate efficiencies and innovation into the system

Taking a look ‘over the fence’ so to speak is a highly effective method of evaluating the merits of an innovation. Seeing how a new idea will work in reality is very important for many agriculturalists. Attending events locally and out of your area are valuable ways to meet new people, and hear about innovative ways they are addressing productivity issues of their own properties.

Whether it be increasing the use of selected technology in your operation to cut down on labour costs, providing more detailed information to you as part of the decision making process, or doing a better job managing your breeding flock, in terms of management, each operation will have unique needs, and areas for improvement priority.

Consider innovations which might seem out of your reach, or a bit far off in your timeframe. You may find pathways to efficiency from incorporating part of these efficiency measures into your management. They may not be immediately able to be incorporated into your management, but ensure you research new technologies/techniques and plan to implement suitable ones into your management sometime in the future.

Signposts Signposts

Read

Alchin M, Addison J, Shrubb V, Cockerill Z, Young M, Johnson T and Brennan G (2008) Pastoral Profits Guide, Department of Agriculture and Food, Western Australia Agricultural Authority

Gardner M (2013) Telemetry Systems PDS S1001 Final Report, Vanguard Business Services, 02 6885 1925

James C and Bubb A (2008) WaterSmart PastoralismTM Handbook: A practical guide to stock water management in desert Australia, Desert Knowledge CRC, Alice Springs

Mellors C, Morley N and Muster C (2009) Australian Pastoral Property Innovation Manual, Caring For Our Country and AWI

Squires V (1981) Livestock Management in the Arid Zone, Inkata Press

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