EXPANDING THE GRAIN SORGHUM INDUSTRY

 

Introduction

Growth in intensive livestock industries, the potential for grain-based biofuel production, and high and sustained global grain prices underpin the significant potential for expansion of the feed grain industry in NE Australia. This is despite continued increase in input costs and climate uncertainties. A scoping study is being conducted to quantify the potential for investment in expansion of the sorghum industry in NE Australia.

 

There are three major questions –

•         What is the supply-demand situation and the likely economic impact of industry expansion?

•         Is there biophysical potential to expand sorghum production?

•         What are the profit-risk implications at farm scale?

 

Feed grain supply-demand situation and economic impact of expansion

An earlier supply-demand analysis (Hammer et al., 2003) was updated as part of the scoping study. Demand was calculated from feed grain usage based on animal numbers (feedlot cattle, pigs, poultry, dairy) as about 3.65Mt per annum. This estimate does not include any allowance for biofuel usage. Supply capacity was simulated using regional (shire) scale yield models (Potgieter et al., 2006) for sorghum, wheat, barley and maize. Allowance was made for non-feed grain uses and export. Average cropped area statistics for 1993-2007 (ABARE data) were used to generate shire scale production tonnage estimates. Simulations were conducted using climate data for seasons from 1901 to 2007. Estimated feed grain demand matched average supply (Fig. 1), suggesting that about half of all years would be in grain deficit.  Further, in nearly all El Nino years, local supply would not be expected to meet demand.

 

Economic analysis indicates a total value of feed grain in NE Australia of about $885M, which generates total added value (after allowing for input costs and flow on effects) of $708M per annum to the regional economy. Every 10% increase in sorghum production adds about $48M per annum to this total value. Hence, there is considerable economic impetus to expand the grain sorghum industry. In this study, areas outside the conventional cropping zone were considered.

 

Biophysical potential for industry expansion

An analysis of soil resources highlighted large areas of potentially suitable clay soils to the west of the current cropping zone. They are located west of Walgett and on a broad arc from Augathella, through Tambo, Blackall, and Longreach, to Richmond. By manipulating maturity, density, row configuration and tillering it might be possible to develop a combination of genetics and management suitable for dryland cropping in these marginal environments. A comprehensive simulation analysis was undertaken using the sorghum crop model in APSIM with relevant soil and historical climate data to explore potential (hypothetical) G*M combinations. A 100+-year simulation was conducted for each G*M combination for each site and soil. Specific sowing dates and starting soil water conditions were specified for each year of the simulation.  

 

By quantifying the trade-off between average production and risk (Figure 2) it was possible to identify the most feasible production options. Risk was calculated as the percentage of years that did not exceed a threshold (near breakeven) yield, which was set at 1.5 t/ha. On this basis, potential target areas were identified at Walgett, Augathella, and Tambo. In all cases, low intensity systems (low density, low tillering, early maturity, skip row) were favoured and only sufficiently reliable if at least 90mm of soil water was available at sowing.  Outcomes at other locations, such as Blackall (see Figure 2), showed low average yield and unacceptable risk.

 

 

Figure 2: Average yield versus risk of not exceeding a threshold yield of 1.5t/ha for a range of G*M combinations for standard soil conditions at Augathella (left) and Blackall (right). Each point represents the outcome for a 100+-year simulation for a single G*M combination. The black line indicates the yield-risk trade-off frontier of feasible combinations.

 

Profit-risk implications at farm scale

Even without considering the complex issues of developing a cropping enterprise on a grazing property and availability of local grain markets, cropping must be sufficiently frequent to generate reliable returns and undertaken in a rotational system that deals with weeds, disease, and soil issues. The single crop simulations have identified locations with biophysical potential. However, the next step will be to determine whether this type of cropping enterprise can be profitably and sustainably introduced into a whole farm program. Simulations of potential rotations combined with whole farm economic analyses are currently underway to explore this issue. 

 

Acknowledgements

QDPI&F have funded this pilot study as one of their New Horizons projects. A team of specialists was brought together to undertake the study. This included Jo Owens (soils), Andries Potgieter (regional modelling), Al Doherty (crop modelling), Richard Routley (agronomy), Howard Cox (agronomy), Lindsay Ward (agronomy), Corey James (economics), and Miriam East (economics).

 

References

Hammer, G.L., Potgieter, A. and Strahan, R. (2003). The reliability of supply of feed grains in the northern region. Proceedings of the Fifth Australian Maize Conference, Toowoomba, Feb 2003. p.120-6.

 

Potgieter, A.B., Hammer, G.L. and Doherty, A. (2006) Oz-Wheat: A regional scale crop yield simulation model for Australian wheat. Queensland Dept. Primary Industries and Fisheries, Information Series No QI06033, Brisbane, Australia. (ISSN 0727-6273)

 

Contact details

Prof Graeme Hammer

School of Land, Crop and Food Sciences

The University of Queensland, Brisbane, Q 4072

Ph: (07) 3346 9463

Fx: (07) 3365 1177

E-mail: g.hammer@uq.edu.au