Chapter 12.3 Efficient pastoral production
Chapter 12.3 Efficient pastoral production
Background information
Today’s agricultural businesses are continually facing pressures to improve the efficiency of the operation. Pastoral businesses are particularly given to a need to devise efficient and innovative 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
- Benchmark your business against others of similar nature – know key benchmarks and set goals to achieve these if you are not yet achieving them.
- Evaluate where labour savings can be made in your operation to improve efficiency.
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 you to run a higher numbers of breeding ewes?
- Could you introduce another enterprise to increase enterprise flexibility which you can exit if seasonal trigger points are reached?
- Are there smarter ways of doing certain things in your operation?
- What is the average (or yearly) net reproduction rate (NRR) of your breeding ewes? How does this compare with industry best practice?
Some common benchmarking examples include:
- 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
- Flock net reproduction rate (NRR)
- Scanning %, marking % and weaning %.
Management calendar
How does the management calendar of your business look? Do you have a management calendar?
A management calendar is a dynamic resource which outlines key management dates, timings and things which are 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 and the personnel required to perform these operations and provide the opportunity to easily see where any opportunities for undertaking improvement activities can be 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 which may place stress on your labour units, or other key deadlines, such as administrative deadlines.
Do this in a formal way – use tool 12.4 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 for productivity?
- 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?
- Would better management or genetics improve overall productivity?
- What is the district average (long term) for weaning rates of lambs? How does your operation compare with this?
- Do you pregnancy scan your ewes? How do you (or could you) use this information to your advantage?
- Do you know where the weak points (what may be letting you down) are in your flock management?
Ask yourself these questions, and attempt to answer them with as much actual data and historical flock records 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 the 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. Satellite yards are another capital investment that can aid with reducing mustering times for key operations such as lamb marking.
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. Such facilities are becoming more common throughout the pastoral areas of Australia. Maintaining ground cover during dry times ensures country is more ‘rain ready’ and captures rainfall that will contribute to growth of feed.
Supplementary feeding, although not widespread throughout some pastoral areas, can be made more efficient and effective by:
- Using feed out trailers, including those with options for self-weighing trailers which allow accurate amounts to be fed out.
- Investing in 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 using electronic identification (eID) ear tags is growing in prevalence in the sheep industry.
eID 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 the sale of livestock.
An auto-drafter allows sheep 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.
Working dogs
Man’s best friend can be a significant asset to an efficient pastoral operation. 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 constraints common in the pastoral area, it is essential to have a competent team of working dogs for your operation. Prices vary for dogs, but well-trained dogs can easily recoup their purchase price in productivity and efficiency in mustering and yard work.
Ensure that your working dogs are well cared for, kept in good health, 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
Results of comparison based on wether trial and sire evaluation results from 2007 – 2018 for benchmarks on wool cut, quality, and performance.
Annual publication reporting the results of sires across all Merino Sire Evaluation sites. Sire results published in Merino Superior Sires include Top 50 sire rankings for the four main Indexes, Australian Sheep Breeding Values (ASBVs) for wool, carcase and breech traits, plus visual classing results.
For sheep producers wanting to improve the performance of their enterprises, a good understanding of the current operating efficiency of the business is essential. Cost of production is a key factor affecting the profitability of sheep enterprises and calculating your cost of production is one of the important steps in assessing flock performance and a first step to making improvements.
A tool to help you determine your cost of production for sheep, beef and goats and compare performance annually.
A guide to the relative profitability of similar enterprises and an indication of management operations involved in different enterprises.
A guide to the relative profitability of similar enterprises and an indication of management operations involved in different enterprises.
A template to map out your annual operations and assist in planning and managing your enterprise.
This tool provides a systematic basis for planning the management calendar for the breeding flock. The Lambing Planner is available as a hard copy or can be downloaded as an app.
The course is delivered in small groups of 5-7 sheep producers that meet six times per year with a professional trainer. During these hands-on sessions, the group visits each participating farm and learns skills in condition scoring, pasture assessment and best practice ewe and lamb management to increase reproduction efficiency and wool production, mainly through reducing ewe and lamb mortality.
Review innovation across the industry
Background information
Well maintained and appropriate infrastructure is paramount to an efficient operation. Pastoral properties have often led the way with innovation in the way of infrastructure to counteract the 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:
- improvements to existing shearing sheds or construction of new sheds
- changes to yard design – internal and external, loading ramps
- self-mustering yards for managing both livestock and feral animal control
- improvements to paddock gates, stock grids, development of laneways
- water systems, including telemetry to allow remote monitoring of tanks and troughs
- pumping systems, such as solar pumps to provide pumping assurance (as opposed to reliance on wind) and potentially reduce 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.
At a glance
- What’s going on around the industry that you could adapt to work in your operation to improve efficiency?
- What are the successful operators doing that you could be doing to improve productivity or efficiency?
- What management options are successful operators using?
- What infrastructure innovation are the successful and innovative operators using?
- Are there some non-pastoral innovations that you could adapt to your area?
- Who is utilising remote technology, and how does it perform for what is it being used for?
- Who is undertaking natural resource management work, and what benefits is this work delivering?
Management options
There are a number of management options that can contribute to more effective management and potential labour and cost savings. Some examples are:
Invest in feeding infrastructure for improved labour efficiency and productivity gains. For example, using self feeders can be more economical than trail feeding as you can fill up big feeders less often and reduce the labour required to complete the feed run.
Advantages of being able to more conveniently control sheep nutrition includes:
- Improved animal health outcomes due to more consistent and adequate nutrition
- Feed lupins to rams pre-joining to improve conception rates
- Improved weaning rates
- Increased growth rates
- Increased wool growth and improved wool quality
- Ability to retain key breeding stock in tough seasons
- Rest country to maintain variety and avoid over-grazing.
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 benefits in setting up such a system.
Case study
The benefits of water telemetry
Scott Michael, a producer from pastoral South Australia spoke on the benefits of implementing water telemetry technology into his business, and concluded:
- Telemetry systems can create considerable savings in time and are cheap insurance in relation to water management and monitoring.
- Telemetry systems are a viable cost saving technology with multiple ways of communicating to producers through data, images and videos.
- Daily text messages or emails are received to provide a snapshot of water patterns through the system and tank level alerts.
- A leak detection unit provides continually monitoring of water flow and usage patterns over a 24hr period and identifying costly pipe breakages and trough leaks.
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.
Determine where greatest opportunities are to benefit from innovation and efficiencies
Background information
The opportunity to improve profitability in your operation mostly hinges on reducing cost of production or increasing the price received for your product.
It is not always possible to make significant and direct change to improve the price received for your product, however, looking for areas to save time, combine activities, improve safety or add infrastructure to assist with operational tasks can have immense impact on the efficiency of tasks.
At a glance
- Benchmarking your business against industry standards is a helpful way of gauging how your business is performing.
- You may find it beneficial to engage a professional to help with this process.
Cost of production is an important benchmark which can highlight where efficiencies can be made within your enterprise. Utilise the tools AWI and MLA have developed to assist with calculating these important benchmark figures for your business. Use tool 1.7, tool 1.8 and tool 1.9 from MMFS Module 1 Plan for Success 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 and 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 and key performance indicators (KPIs). Use tool 1.10 from MMFS Module 1 Plan for Success 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 1.13 from MMFS Module 1 Plan for Success 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 while monitoring baits stations or traps for feral animals. Try to situate baits in places where it is readily manageable to monitor and replenish regularly.
Sheep performance is an area where opportunities often exist to improve efficiency of production and boost performance.
Bear in mind the running costs of 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.
For example, 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 your cost of production and identifying and dealing with poor performing animals in your flock.
Some key figures you should know about your flock are:
| Benchmark | Calculation |
| Scanning percentage (%) | foetuses scanned ÷ total number of ewes joined x 100 |
| Conception rate (%) | ewes scanned pregnant ÷ total number of ewes joined x 100 |
| Percentage scanned empty (%) | number of ewes scanned empty ÷ total number of ewes joined x 100 |
| Lamb marking percentage (%) | lambs marked ÷ total number of ewes joined x 100 |
| Lamb survival percentage (%) | lambs marked ÷ total number of foetuses scanned x 100 |
| Ewe failed to rear percentage (%) | ewes dry at lamb marking (from wet & drying) ÷ ewes scanned pregnant x 100 |
| Weaning percentage (%) | lambs weaned ÷ total number of ewes joined x 100 |
| Weaner survival percentage (%) | number of lambs at 12 months ÷ lambs weaned x 100 |
| Ewe survival percentage (%) | number of ewes in mob at end of period (e.g. marking) ÷ ewes in mob at start of period (e.g. scanning) x 100 |
| Average wool cut per head (kg) | total kg shorn ÷ number of sheep shorn |
| Average clean wool cut per head (kg) | total kg shorn x yield (from test results) ÷ number of sheep shorn |
| Average fleece value per head ($) | total price received for wool ÷ kg sold |
| Average wool cut per hectare/km2 (kg) | total kg shorn ÷ grazed hectares or km2 run on |
| Average kg weaned per ewe (kg) | liveweight of all lambs weaned ÷ ewes wet at lamb marking |
| Kg weaned per hectare/km2 (kg) | liveweight of all lambs weaned ÷ grazed hectares or km2 run on |
| Average sale weight (kg) | liveweight of all lambs sold ÷ number of lambs sold |
| Kg lamb per DSE (kg) | liveweight of all lambs sold ÷ number of DSE run for the year |
| Average price as a % of micron indicator (%) | price received for wool sold ÷ price for relevant AWEX micron indicator x 100 |
| Average price as a % of lamb indicator (%) | price received for lambs sold ÷ price for relevant NLRS indicator x 100 |
| Gross income per DSE | gross enterprise income ÷ number of DSE run for the year |
| DSE managed per labour unit | number of DSE run for the year ÷ number of labour units used within the enterprise for the year, expressed as a decimal |
| Gross income per labour unit | gross enterprise income ÷ number of labour units used within the enterprise for the year, expressed as a decimal |
You may have others that you like to measure.
Consider benchmarking key performance indicators each year. This will allow you to identify trends and take action early where opportunities exist.
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 profitability through access to organic markets which offer 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 insuring your 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 sheep consultants, wool brokers or stock agents.
SIGNPOSTS
Webinars on business management skills which improve the bottom line of sheepmeat, wool and beef producers located in the pastoral region.
Monitoring stock water points using telemetry is saving the Harvey family 14 hours a week and allowing them to spend more time on their beef and lamb direct marketing business.
Justifying the amount saved from livestock water monitoring is a relatively simple process. Everyone knows how long a water run takes and how many kilometres it is, but the real benefits are less tangible – the piece of mind and ability to get off farm without worrying about potential disasters back home.
Scott Michael presents an overview of their use of water telemetry on Carriewerloo Station.
Mt Eba Station is running 10,000–13,000 self-replacing Merino ewes. Discover how they have adopted a range of technology, including pregnancy scanning and remote monitoring technolog,y to improve decision making and profits at their property in central South Australia.
Peter Whittlesea shares his experience with pregnancy scanning and remote monitoring technology at his sheep enterprise in central South Australia.
Josh Cousins presents an overview of their use of water telemetry on Mt Eba.
This virtual farm tour profiling the CC Cooper and Co business across their NSW, SA and WA operations features interviews with Seth, Tom and Leith Cooper and provides insight into key aspects of the business, such as the importance of people management, use of technology in a rangeland business and capital investments (fencing, water, feedlots).
David (Seth) Cooper talks about using telemetry, eID, drones and other technology to make the pastoral property as productive as possible.
The pastoral zone of Australia is vast and there are significant differences in farming systems, access to services, native and pest species, enterprise types and business structures. Although there are these differences, Bestprac demonstrated that all pastoral businesses have techniques, systems or innovations that can be shared across state borders to assist others to improve their skills and knowledge.
The design of shearing sheds affects the efficiency of shearing and wool preparation as well as the health and wellbeing of both people and sheep.
The design of sheep yards affects the efficiency of sheep work as well as the health and wellbeing of both people and sheep.
A monthly newsletter which provides landholders and stakeholders with an update on programs, projects, upcoming events in the Western region.
South Australian producers are now experiencing best practice management solutions as well as cutting edge technology at the Struan and Kybybolite Best Practice Demonstration Farms.
The course is delivered in small groups of 5-7 sheep producers that meet six times per year with a professional trainer. During these hands-on sessions, the group visits each participating farm and learns skills in condition scoring, pasture assessment and best practice ewe and lamb management to increase reproduction efficiency and wool production, mainly through reducing ewe and lamb mortality.
A one-day workshop that gives producers a broad understanding of the environment in which they operate and the core principles behind successfully maintaining grazing land condition and long-term productivity.
Designed for producers to develop a thorough understanding of the grazing land environment in which they operate to strategically manage their grazing business to optimise land condition and productivity in the long-term and begin developing grazing land management plans for their properties.
An in-depth look at the importance of wool price risk management and hedging principles. The content covers types of risk, risk management products, strategies and analysis and shows how a better understanding of these elements can enable an increased uptake of forward contracts and lead to improved market signals.
Decide on ways to incorporate efficiencies and innovation into the system
At a glance
- If you are thinking ‘is there a better way of doing things’ you will continually find improvement in your approach to your business.
Taking a look ‘over the fence’ 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 producers. 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, 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 immediately be able to be incorporated into your management, but ensure you research new technologies and techniques and plan to implement suitable ones into your management sometime in the future.
Other ways of incorporating efficiencies or innovations into the business are through the process of education and training. Educational opportunities exist throughout agriculture in all facets of production, and these are often developed, produced and delivered by industry bodies or experts specifically for the sheep industry. There are many practical opportunities that exist to help agricultural business learn about new technologies and ways of managing in their business.
Use every opportunity to continue with personal and professional development, as no educational opportunity is ever a waste of time. AWI and MLA provide education and training opportunities for the sheep industry – see signposts below for more information.
SIGNPOSTS
Monitoring stock water points using telemetry is saving the Harvey family 14 hours a week and allowing them to spend more time on their beef and lamb direct marketing business.
Justifying the amount saved from livestock water monitoring is a relatively simple process. Everyone knows how long a water run takes and how many kilometres it is, but the real benefits are less tangible – the piece of mind and ability to get off farm without worrying about potential disasters back home.
The pastoral zone of Australia is vast and there are significant differences in farming systems, access to services, native and pest species, enterprise types and business structures. Although there are these differences, Bestprac demonstrated that all pastoral businesses have techniques, systems or innovations that can be shared across state borders to assist others to improve their skills and knowledge.
AWI provides skills training, educational resources and programs, leadership initiatives and practical workshops to support woolgrowers and wool industry professionals.
MLA delivers a range of workshops, tools and other resources for red meat producers to equip them with the latest best-practice knowledge gathered from research that can be applied to improve their businesses.
South Australian producers are now experiencing best practice management solutions as well as cutting edge technology at the Struan and Kybybolite Best Practice Demonstration Farms.
