Break crop study reveals secrets of success
Author: Natalie Lee | Date: 16 Dec 2013
A study of break crops and rotations used in Western Australia’s eastern grainbelt has found that more profitable growers have a thorough understanding of their profit drivers and maintain flexibility in their rotations.
Canola, wheat, barley rotations ranked highest in the six-year gross margin analysis, followed closely by pasture, wheat, canola, wheat rotations.
“However, these are not the only rotations that should be run in the region and another key outcome from this study is that there is not just one way to achieve a positive outcome,” said study leader Graeme McConnell, of Planfarm.
The study, whose findings are outlined in a Break Crop Economics report, was funded by the Grains Research and Development Corporation (GRDC) Kwinana East Regional Cropping Solutions Network (RCSN) after it identified a lack of knowledge about profitable break crops suitable for low rainfall cropping enterprises in the eastern grainbelt.
Mr McConnell said farming profitably in this region had been very hard to achieve in recent years due to tough seasonal conditions.
“Despite this, there are a number of farm businesses that have managed to maintain sound levels of profitability through this period,” he said.
“The aim of this project was to consider the break crops and rotations used by farmers with a long-term track record of achieving above average profitability, despite the difficult years.”
Mr McConnell said the study results were based on individual margin analysis and discussions with Planfarm’s top 25 per cent performing farmers in the region, identified from a benchmarking analysis.
“Although the margins presented in the report were reconstructed, they were based directly on the outcome of client analysis,” he said.
Mr McConnell said growers surveyed had a thorough understanding of their individual profit margins – particularly for break crops - and these margins varied markedly between farms and soil types.
“Many of the farmers studied have very different approaches, which is reflected in the variations seen in some of their margins,” he said.
“For example, the Merino sheep margin (from pasture rotations) varied from $25 per hectare to $95/ha even within the high performing group of farmers.
“Based on this result alone, it is likely that the optimal rotation will be different for each of these growers, and that those with the $25/ha margin are more likely to adopt a more intensive cropping rotation.”
Mr McConnell said all growers surveyed noted flexibility as important to each rotation, meaning longer sequences were often subject to change, according to weed burdens or seasonal conditions.
From the 34 rotations studied, only two were continuous cereal rotations.
“About 70 per cent of the hectares planted by the group were to cereals, which appears to be a little higher than the average of about 60 per cent of cereals,” Mr McConnell said.
“Fallow/pasture and canola accounted for the majority of break crop hectares, with this being dominated by pasture.”
Mr McConnell said cost control was also seen by the farmers as very important to maintain profitability in the type of seasons experienced over the analysis period.
“This group of farmers also deliberately position themselves as not being early adopters of new technology, instead waiting until new technologies are proven to be effective and profitable,” he said.
“A good example of this is that the relatively high cost of genetically modified (GM) canola seed has resulted in a slower adoption of GM technology in the region, with none of the growers surveyed using Roundup Ready® canola.”
Mr McConnell said 70 per cent of the businesses surveyed maintained a sheep flock and all growers with livestock were willing to run a stocking rate lower than average for their region to have the flexibility to manipulate pastures and spray top early.
“This also provides a level of insurance against poor seasons,” he said.
For a copy of the report, contact RCSN coordinator Julianne Hill on email@example.com, 08 9726 1307 or 0447 261 607.
To assist growers and advisers in understanding the capacity, strengths and weaknesses of the farm business enterprise, the GRDC has produced a comprehensive series of fact sheets available at www.grdc.com.au/FBM-factsheets
WA grain growers and advisers are also encouraged to take advantage of a one-day GRDC Farm Business Update to be held in Merredin on February 13.
For more information or to register visit www.orm.com.au
Caption: Canola and fallow/pasture account for the majority of break crop hectares among profitable farmers surveyed in a ‘break crop economics’ study.
Audio: Click here to listen to Graeme McConnell, of Planfarm, talking about results from the ‘Break Crop Economics’ study or download the audio file from the link below.
Graeme McConnell, Planfarm
0418 900 065
Natalie Lee, Cox Inall Communications
08 9864 2034, 0427 189 827