Flexible stubble management - how to reap returns to the bottom line

Take home messages

  • Be flexible and pro-actively manage stubble for your seeding system.
  • Diversify your crop sequence; add legumes to rotation with double break to reduce nitrogen (N) input, reduce annual ryegrass (ARG) weed seedbank and be more profitable.
  • Ensure the scale of the farm is matched to the labour/plant and equipment units for maximum efficiency.
  • At a whole farm level, both the Diversified and Aggressive strategies were profitable, but the diversified was more effective at reducing the ARG weeds.
  • A diversified management strategy is highly profitable but less volatile compared to an aggressive strategy when analysed across the whole farm.
  • Where a farm structure is highly efficient and an aggressive or diverse strategy implemented, the tine opener was more profitable than a disc opener on 300mm rows.
  • Higher return on assets managed (ROAM) across the whole farm were achieved when establishing crops with a disc seeder on 190mm row spacing compared to a parallelogram tine seeder on 300mm row spacing.

Background

Previous studies have highlighted potential negative yield impacts of retained stubble in southern New South Wales (SNSW) (Kirkegaard 1995; Scott et al. 2013), but strict no-till advocates recommend retaining all of the stubble to enhance water capture and storage, ‘soil health’ and crop yields. Over past decades, growers and scientists have continued to examine a range of methods to flexibly manage stubble to improve profitability. These have included the adoption of minimum till (tine) or zero till (disc) seeding equipment and diversifying management strategies such as changing crop sequences, varying N applications and herbicide options.

The addition of a break crop such as canola or a pulse legume into the sequence has been shown to be profitable in its own right in small plot experiments in NSW and an effective management tool for controlling weeds and diseases in stubble retained systems (Swan et al. 2015, Peoples et al. 2016, Swan et al. 2017). However, while growers have found that there are many benefits for retaining stubble, there has been little research on the effect that different farming systems have on the whole farm economics.

This paper has two main sections. In the first section, some main results are reported from a small scale field experiment (full factorial) established at the Temora Agriculture Innovation Centre (TAIC) between 2014 to 2017 that compared three management strategies (Aggressive, Diverse and Conservative) on crop yield, net margins and weed control where crops were either established using a single disc or a tine seeder. In the second section, the results from the experiment are combined with actual farm economic assumptions then analysed and presented in terms of whole farm economic analysis. The three management strategies by seeding systems will then be examined at two farm scales (3000ha and 5000ha in 2013) and at a 3000ha farm scale operation in 2018, to reveal the key drivers in whole farm performance in retained stubble farming.

Methods

Section 1: Strategy management experiment

The experiment was located on a red chromosol soil with surface pHCaCl2 of 5.0 (0-10cm) and 4.6 (10-20cm) and little slope at the Temora Agricultural Innovation Centre (TAIC) 4km North of the township of Temora in south-east NSW (S 34.49°, E 147.51°, 299 m ASL). A fully phased systems experiment was established in 2014 at a site with high levels of Group B resistant ARG (average seedbank of 1864 plants/m2) to compare the yield, profitability and sustainability of three management strategies in a stubble retained no-till (Flexi-Coil® tine seeder with Stiletto® deep banding and splitting boots) and zero-till (Excel single-disc seeder with Arricks’ wheel) farming system (Table 1).

Nitrogen was applied at sowing by deep banding below the seed (tines) or surface applied pre-sowing (disc) at either 20 or 40kgN/ha (Table 2). Pre-emergent and post emergent grass herbicides were applied to the three management strategies as outlined in Table 3. One of the main difference between the herbicides applied in the disc and tine systems related to trifluralin being used in the tine systems, but not in the disc systems, due to crop safety restrictions.

The ARG (Lolium rigidum Gaudin) seedbank was initially measured in March 2014. All plots were then measured in February or March of 2015, 2016 and 2017 to determine the change in ARG seedbank relating to management strategies.

Table 1. The crop rotation for each sequence in the three management strategies in a fully phased experiment at Temora Agricultural Innovation Centre between 2014 and 2017.

Management
strategy

Sequence

Crop
2014

Crop
2015

Crop
2016

Crop
2017

Aggressive

4

Wheat 1 (H)

Wheat 2 (H)

Canola RR

Wheat 1 (H)

Aggressive

6

Wheat 2 (H)

Canola RR

Wheat 1 (H)

Wheat 2 (H)

Aggressive

10

Canola RR

Wheat 1 (H)

Wheat 2 (H)

Canola RR

Diverse

1

Barley

Legume Hay

Canola TT

Wheat (L)

Diverse

3

Wheat (L)

Barley

Legume hay

Canola TT

Diverse

7

Legume hay

Canola TT

Wheat (L)

Barley

Diverse

9

Canola TT

Wheat (L)

Barley

Legume hay

Conservative

2

Wheat 1 (L)

Wheat 2 (L)

Canola TT

Wheat 1 (L)

Conservative

5

Wheat 2 (L)

Canola TT

Wheat 1 (L)

Wheat 2 (L)

Conservative

8

Canola TT

Wheat 1 (L)

Wheat 2 (L)

Canola TT

*(H) and (L) are high and low input respectively and described in Table 2 and Table 3.

Table 2. The planned crop density and seed bed nitrogen quantity/application method at sowing for each crop in the three management strategies for both opener types.

Management
strategy

Crop

Plant density
(plants/m2)

Seed bed
nitrogen quantity
(kgN/ha)

N type
and application

Tine^ Disc#

Aggressive

Wheat 1 (H)

150

40

40

Urea IBS

Aggressive

Wheat 2 (H)

150

40

40

Urea IBS

Aggressive

Canola RR

40

20

20

SOA IBS

Diverse

Barley

120

20

20

Urea IBS

Diverse

Wheat (L)

80

20

20

Urea IBS

Diverse

Legume Hay

40

Nil

Nil

Nil

Diverse

Canola TT

40

20

20

SOA IBS

Conservative

Wheat 1 (L)

80

20

20

Urea IBS

Conservative

Wheat 2 (L)

80

20

20

Urea IBS

Conservative

Canola TT

40

20

20

SOA IBS

# Nitrogen spread on soil surface prior to sowing (Disc)
^ Nitrogen deep banded below the seed using Stiletto® boots (Tine)
IBS=incorporated before sowing; SOA=sulphate of ammonia; TT=triazine tolerant

Table 3. The herbicides applied at sowing and in-crop to control herbicide resistant annual grasses at Temora Agricultural Innovation Centre for each management strategy x opener type.

Management strategy

Crop

IBS herbicides x Opener

In-crop grass herbicides

Tine

Disc

Tine and disc

Aggressive

Wheat 1 (H)

Sakura® @ 118g/ha + Avadex Xtra® @ 2L/haɸ

Sakura® @ 118g/ha + Avadex Xtra® @ 2L/haɸ

Atlantis® @ 0.33L/ha

Aggressive

Wheat 2 (H)

Boxer Gold® @ 2.5L/ha

Boxer Gold® @ 2.5L/ha

Atlantis® @ 0.33L/ha

Aggressive

Canola RR

Rustler® @ 1L/ha + TriflurX® @ 2L/ha

Rustler® @ 1L/ha

Roundup Ready® @ 0.9kg/ha (2 and 6 leaf)

Diverse

Barley

Boxer Gold® @ 2.5L/ha

Boxer Gold® @ 2.5L/ha

Nil

Diverse

Wheat (L)

Sakura® @ 118g/ha + Avadex Xtra® @ 2L/ha

Sakura® @ 118g/ha + Avadex Xtra® @ 2L/ha

Atlantis® @ 0.33L/ha

Diverse

Legume Hay

Nil

Nil

-

Diverse

Canola TT

Rustler® @ 1L/ha + Gesaprim® @ 1.1kg/ha + TriflurX® @ 2L/ha

Rustler® @ 1L/ha + Gesaprim® @ 1.1kg/ha

Status® @ 0.5L/ha + Gesaprim® @ 1.1kg/ha

Conservative

Wheat 1 (L)

Diuron @ 1L/ha + TriflurX® @ 2L/ha

Diuron (500g/L) @ 1L/ha

Atlantis® @ 0.33L/ha

Conservative

Wheat 2 (L)

Diuron (500g/L) @ 1L/ha + TriflurX® @ 2L/ha

Diuron (500g/L) @

1L/ha

Atlantis® @ 0.33L/ha

Conservative

Canola TT

Gesaprim® @ 1.1kg/ha + TriflurX® @ 2L/ha

Gesaprim® @ 1.1kg/ha

Status® @ 0.5L/ha + Gesaprim® @ 1.1kg/ha

IBS = incorporated before sowing; TT=triazine tolerant; ɸRate used only in combination with TriflurX

Nitrogen was applied to all crops except the legume hay crop at GS31 (cereals) or stem elongation (canola) at different amounts determined by the starting soil mineral N concentration to attain a predicted yield of 70% of maximum potential as determined by Yield Profit® for each year. Grain yields were measured by plot header harvesting only the middle four rows and by hand harvesting large areas (>1.0 m2) of crop and threshing to measure the total dry matter production, harvest index and to estimate the amount of crop residue returned to the plot.

Annual ryegrass, soil mineral N and grain yield were analysed by ANOVA with ‘Treatment’ as (Management/Sequence) x Opener, and ‘Block’ as Block/Plot pair/Plot using GenStat 18 software package (VSN International Ltd.). The ARG data often required transformations using either loge or square root to normalise the residuals. Results in the tables are reported following back transformation and significant difference indicated by letters. Significance is assumed at the 95% confidence level and tests of mean separation were made using Fisher’s least significant difference for the 95% confidence level.

Determining nett margins in strategy management experiment

Nett margins were calculated by subtracting input and operational costs from total income. The total income was determined by selling the grain or hay and multiplying the yield (tonne/ha) according to quality (oil % - canola, grade-wheat, type of hay) by the on-farm price/tonne for the day of harvest at a silo that purchased that product.

The input costs included all seed, fertiliser and pesticides costs. Seed and fertiliser costs were derived from local Temora supplies on a per tonne basis. Pesticide costs were derived from the annual NSW DPI winter spray guide.

Total operation and levy charges included insurance and levies such as GRDC grower’s levy or end point royalty (EPR), and operation costs such as transport, sowing, spraying, windrowing, harvesting or hay making charges. Levies, insurances and EPR were either derived annually from the South Australian Grain Industry Trust Fund (SAGIT) publication or directly from the company. Transport costs and all other on-farm operational costs were calculated at a contract rate, derived from the SAGIT annual handout.

Section 2: Whole farm analysis methodology and assumptions

Part A: Whole farm analysis where labour, plant and machinery were matched to the scale of the business to drive cost efficiencies

The agronomic results (crop yields by grade) from the three management strategies (Aggressive, Conservative and Diverse) by two opener types (disc and tine seeders) over the four years were incorporated into three farm-scale scenarios. The first two scenarios examine the whole farm analysis for a 3000ha and a 5000ha farm enterprise between 2013 and 2017 with the assumptions relating to the operation (equipment, labour, costs) and main stream agronomic advice specific to the period starting in 2013. This was necessary to ensure a reasonable comparison could be made between the experiment results and the operations of the time. The third scenario examines a 3000ha farm enterprise in 2018 that incorporates the advances in agronomy and equipment that many farming enterprises are currently using into the 2018 whole farm analysis.

In all of the analysis, there has been no input or variable costs associated with spraying over the summer for weed control, and land prices are assumed to be constant for the four-year period (no capital appreciation has been accounted for).

A shortened version of the assumptions used to calculate the whole farm analysis is outlined in this paper, however, a complete detailed set of assumptions can be obtained from the authors if required.

Scenario 1: 3000ha cropping in 2013

Tractor 1 = 330hp used for sowing (100%), harvest-chaser (100%), spreading lime/topdressing (50%). Annual tractor hours is approximately 800 hours. (Tractor = $313,000 start)

Tractor 2 = 250hp used for spraying (100%) and spreading urea/lime (50%). Annual tractor hours is approximately 260 hours. (Tractor = $237,500 start)

Tine seeder: Flexicoil® tines with press wheels, 12m @ 300mm row spacing, sowing speed of 10km/hr with fuel usage @ 46L/hr. (Air cart = $100K, Seeder bar and row units = $120K)

Disc seeder: Single disc seeder with Arrick wheels, 12m @ 300mm row spacing, sowing speed of 12km/hr with fuel usage @ 40L/hr. (Air cart -2nd hand = $100K, Disc seeder bar & row units = $200K

Labour units = 2 @ $115K and $70K/year including on cost

Land value = $6175/ha

Total asset value ($/ha) = $6913

Other expenses = contract harvest rate ($15/t), Freight ($1.20/t/km), Hay making ($75/t), Fuel ($1.40/L), Boomspray and spreader (15L/hr), Windrower (20L/hr), Header (55L/hr) and Chaser bin (10L/hr)

Other plant and equipment: 3 vehicles, 2 motor bikes, auger, prime mover, trailer and grouper, batching plant (various depreciation rates)

Also included are administration, electricity and gas, insurances, rates/rents, repairs and maintenance.

Scenario 2: 3000ha cropping in 2013

Tractor 1 = 450hp used for sowing (100%), harvest-chaser (100%) and spreading lime/topdressing (50%).  Annual tractor hours is > 1000hours. (Tractor = $427,500 start)

Tractor 2 = 330hp used for spraying (100%) and spreading urea/lime (50%). Annual tractor hours is approximately 400 hours. (Tractor = $313,000 start)

Tine seeder: Flexicoil® tines with press wheels, 18m @ 300mm row spacing, sowing speed of 10km/hr, with fuel usage @ 69L/hr. (Air cart = $120K, Seeder bar and row units = $170K)

Disc seeder: Single disc seeder with Arrick wheels, 18m @ 300mm row spacing, sowing speed of 12km/hr with fuel usage @ 60L/hr. (Air cart -2nd hand = $120K, Disc seeder bar and row units = $250K

Labour units = 3.5 @ $115K, $70K and $66K/year including on cost.

Land value = $6175/ha

Total asset value = $6690/ha

Other expenses = as scenario 1

Other plant and equipment: 4 vehicles and other as scenario 1

Includes administration, electricity and gas, insurances, rates/rents, repairs and maintenance.

Scenario 3: 3000ha cropping in 2018

Tractor 1 = 330hp used for sowing (100%), harvest-chaser (100%), spreading lime/topdressing (50%). Annual tractor hours is approximately 800 hours. (Tractor = $313, 000 start)

Tractor 2 = 250hp used for spraying (100%) and spreading urea/lime (50%). Annual tractor hours is approximately 260 hours. (Tractor = $237,500 start)

Tine seeder: Parallelogram tines, 12m @ 300mm row spacing, sowing speed of 8.75km/hr with fuel usage @ 46L/hr. (Air cart = $100K, Seeder bar and row units = $250K)

Disc seeder: Single disc seeder with Arrick wheels, 12m @ 190mm row spacing, sowing speed of 11km/hr with fuel usage @ 46L/hr. (Air cart -2nd hand = $100K, Disc seeder bar and row units = $250K

Labour units = 2 @ $115K and $70K/year including on cost.

Land value = $6175/ha

Total asset value = $6929/ha

Other expenses = as scenario 1.

Other plant and equipment: as scenario 1.

Administration, electricity and gas, insurances, rates/rents, repairs and maintenance.

Scenario three was included to highlight a couple of the main changes in the farming systems that had occurred between 2013 and 2018, which included the purchase of parallelogram tine seeder to replace the flexi-coil, and the reduction in row spacing from 300 to 190mm with the disc seeder. In Scenario three, the whole farm analysis also included an estimated increase in crop yield due to narrower row spacing, determined on the published results from Scott et al (2013). The change in yield is outlined below in Tables 4 and 5.

Table 4. Crop yield (t/ha) and cost/benefit ($/ha) of establishing wheat crops using wide row sowing with wheat at $250/t in southern and central NSW, from Scott et al (2013).

Wheat yield in t/ha and (cost/benefit)

Row spacing

180 mm

250 mm

300 mm

420 mm

0.5 t/ha

0.50 (+$0.6)

0.50 (+$1)

0.51 (+$2)

1.0 t/ha

0.98 (-$5)

0.97 (-$8)

0.93 (-$16)

2.0 t/ha

1.94 (-$15)

1.89 (-$27)

1.79 (-$53)

4.0 t/ha

3.85 (-$35)

3.75 (-$63)

3.49 (-$127)

6.0 t/ha

5.77 (-$58)

5.70 (-$100)

5.20 (-$200)

Table 5. Crop yield (t/ha) and cost/benefit ($/ha) of establishing canola crops using wide row sowing with canola at $500/t in southern and central NSW, from Scott et al (2013).

Canola yield in t/ha and (cost/benefit)

Row spacing

180 mm

250 mm

300 mm

420 mm

1.0 t/ha

0.96 (-$18)

0.94 (-$31)

0.93 (-$16)

2.0 t/ha

1.94 (-$28)

1.91 (-$47)

1.81 (-$95)

3.0 t/ha

2.93 (-$37)

2.87 (-$64)

2.74 (-$127)

4.0 t/ha

3.91 (-$47)

3.84 (-$80)

3.68 (-$160)

Part B: Methodology to examine the impact of a less efficient cost structure on the whole farm analysis

In this whole farm analysis, labour, plant and equipment were not matched to the scale of the business, with the aim to demonstrate how sub-standard scale can reduce profitability. This comparative analysis used the pooled average results over the four phased trial years across all strategies. The property size has been halved from the 3,000ha in the initial analysis to 1,500ha. The number of labour units has been halved which still provides labour efficiency of 1,500ha/labour unit.

The average cost of labour changes with smaller scale as the owner’s labour is assumed to be the primary labour unit, and is charged at $115,000 per unit, while the secondary labour unit is charged at $70,000 per unit. This means in a smaller business the average cost of labour is higher relative to a larger business. The cost of owner labour is based on Holmes Sackett ‘Farm labour data’ and accounts for the opportunity cost of having a highly skilled labour unit operating within the business. The overheads have been reduced by thirty percent. Thirty percent has been used because typically, overhead costs don’t change on a pro-rata basis with scale. Neither yield nor income per hectare change.

Results

Section 1: Results from the strategy management experiment 2014-2017

The most profitable crop across all management strategies between 2014 and 2017 were canola with an average nett margin of between $612 and $704/ha/year and a profit/cost ratio of between $1.10 (Aggressive strategy) to $1.50 (Diverse strategy) for every $1 spent (Table 6). The highest canola grain yield was produced by the hybrid Roundup Ready (RR) canola in 2015 and 2016 (3.1t/ha and 3.0t/ha, respectively), however, this required an increase of 18% in average total costs (Table 8). The decile 9 season of 2016 resulted in all canola yielding between 2.8 and 3.0t/ha (Table 9).

Tables 6. Average net margins (EBIT) and profit:cost ratio averaged across openers at Temora, NSW, 2014-2017.

Cropping
strategy

Crop type

Average
total cost
2014-17
($/ha/yr)

Average
net margin
2014-17
($/ha/yr)

Average
4yr profit:
Cost ratio

Aggressive

Canola
RR

$571

$612

1.1

Aggressive

Wheat
(yr 1)

$535

$388

0.7

Aggressive

Wheat
(yr 2)

$510

$361

0.7

Conservative

Canola
TT

$507

$561

1.1

Conservative

Wheat
(yr 1)

$436

$226

0.5

Conservative

Wheat
(yr 2)

$439

$196

0.4

Diverse

Vetch
(hay)

$482

$381

0.8

Diverse

Canola
TT

$482

$704

1.5

Diverse

Wheat

$497

$404

0.8

Diverse

Barley

$494

$417

0.8

RR= Roundup Ready; TT=triazine tolerant

The Diverse management strategy is extremely profitable achieving a net margin ($476/ha/year) which is higher than in the Aggressive strategy ($454/ha/year) and at lower cost ($489/ha/year compared with $539/ha/year) and thus higher profit:cost ratio ($0.98 compared with $0.83) (Table 7). The reduced costs in the Diverse strategy are driven by lower fertiliser N inputs from the inclusion of vetch hay, which requires no fertiliser N and provides residual N for subsequent crops. The vetch hay treatment was profitable in its own right with an average net margin over the four years of $381/ha/year and a profit:cost ratio of $0.80:$1.00.

The average cost for N fertiliser in the Aggressive strategy was $111/ha/year compared to $72/ha/year in the Diverse strategy; a saving of $41/ha/year. Over the four phased years, the barley crop in the Diverse strategy was also more profitable than the second wheat crop in either the Aggressive or Conservative strategy (Table 7), despite record low barley prices in the 2016/17 season. There were no significant differences in crop yield between the disc and tine seeders where weeds were successfully managed in the Diverse and Aggressive strategies. This equated to similar net margins in the Diverse ($484/ha – tine compared with $469/ha in disc) and in the Aggressive strategy ($467/ha – tine compared with $440/ha – disc). In the conservative strategy with low-cost pre-emergent herbicides, crop yields were higher in the tine system where ryegrass could be managed with the addition of trifluralin.

Table 7. Average nitrogen and total costs, net margins and profit:cost ratio for each management strategy combined for opener type.

Cropping
strategy

Average
N costs
($/ha/yr)

Average
total cost
2014-17
($/ha/yr)

Average
net margin
2014-17
($/ha/yr)

Average
4yr profit:
Cost ratio

Aggressive

$111

$539

$454

$0.83

Conservative

$107

$461

$328

$0.69

Diverse

$72

$489

$476

$0.98

There were no significant differences in the net margin of strategies when sown with either the disc or tine openers, except in the Conservative strategy when sown with a disc opener. The profit:cost ratio was reduced from $0.88 for every $1 spent to $0.69 (Table 8).

Table 8. Average net margins across all crop types for each crop system by opener type between 2014 and 2017 at Temora, NSW.

Management
strategy

Net margins
2014
($/ha)

Net margins
2015
($/ha)

Net margins
2016
($/ha)

Net margins
2017
($/ha)

Average
net margins
2014-17
($/ha/yr)

Profit:
Cost ratio
2014-17
TineDiscTineDiscTineDiscTineDiscTineDiscTineDisc
Aggressive $424 $422 $569 $591 $533 $449 $344 $297 $468 $440 $0.86 $0.83
Conservative $441 $171 $540 $463 $537 $336 $171 -$39 $422 $233 $0.88 $0.69
Diverse $488 $493 $520 $525 $552 $495 $373 $364 $483 $469 $0.99 $0.98

Table 9. Effect of management strategy on crop grain yields sown with disc and tine openers at Temora, NSW, 2014-2017.

Management
strategy

Crop
2014-17

Opener

Grain/DM yield

Average
grain yield

2014-2017
(t/ha)

2014
(t/ha)

2015
(t/ha)

2016
(t/ha)

2017
(t/ha)

Aggressive

Can RR

Disc

2.2

3.1

2.9

1.8

2.5

Aggressive

Wh 1 (H)

Disc

3.1

3.5

5.5

3.8

4.0

Aggressive

Wh 2 (H)

Disc

3.2

3.9

4.9

3.0

3.8

Diverse

Can TT

Disc

1.8

2.6

2.9

2.1

2.4

Diverse

Barley

Disc

4.2

5

6

3.8

4.8

Diverse

Leg Hay

Disc

4.2

2.9

3.9

3.9

3.7

Diverse

Wh (L)

Disc

3.3

3.5

5.2

3.5

3.9

Conservative

Can TT

Disc

1.6

2.1

2.8

1.4

2.0

Conservative

Wh 1 (L)

Disc

1.9

3.6

2.4

1.7

2.4

Conservative

Wh 2 (L)

Disc

1.5

2.8

3.3

1.2

2.2

Aggressive

Can RR

Tine

2.2

3.1

3

2.1

2.6

Aggressive

Wh 1 (H)

Tine

3

3.4

6

3.5

4.0

Aggressive

Wh 2 (H)

Tine

2.9

3.5

5.3

2.9

3.7

Diverse

Can TT

Tine

1.7

2.4

3

2.3

2.4

Diverse

Barley

Tine

4.5

5

6.1

4.0

4.9

Diverse

Leg Hay

Tine

4.2

3.4

4

4.1

3.9

Diverse

Wh (L)

Tine

3.1

3.3

5.8

2.8

3.8

Conservative

Can TT

Tine

2.1

2.4

3

1.8

2.3

Conservative

Wh 1 (L)

Tine

2.5

3.5

4.7

2.2

3.2

Conservative

Wh 2 (L)

Tine

2.9

3

4.4

2.5

3.2

(H) and (L) are high and low input respectively and described in Table 2 and Table 3; RR=Roundup Ready; TT=triazine tolerant

Effect of management strategy on weeds

The average ARG seedbank across the trial area in February 2014 was 1864 plants/m2. Both the Aggressive and Diverse management strategies significantly reduced the ARG seedbank to 351 plants/m2 by February 2016, significantly lower than in the Conservative strategy (Table 10).

However, implementing a Diverse management strategy that included a double break was not only profitable and less risky (lower profit:cost ratio), but was the most effective strategy at reducing ARG weed populations. The ARG seedbank was reduced by 70% in three years in the Diverse strategy compared to the Aggressive strategy and maintained that difference into February 2018 (Table 10). Where low cost herbicides were used in the Conservative strategy, the ARG numbers increased in the wheat-wheat-canola sequence by 800%.

There was a significant effect of opener type on ARG control with higher ARG populations found when sown with a disc opener compared to a tine opener (data not shown). The ARG populations increased significantly in the Conservative strategy sown with a disc seeder where low-cost herbicides were used, but this was no surprise as there are limited low cost herbicide options on label for a disc opener. Therefore, it is recommended that where high ARG populations are suspected, more expensive herbicide options and greater crop competition from narrower row spacing and crop types should be used where a disc opener is preferred.

Table 10. Main effect of management strategy on ARG seedbank averaged across disc and tine openers at Temora, NSW, 2014-2017.

Management strategy

Seedbank
Feb 2015
seeds/m2

Seedbank
Feb 2016
seeds/m2

Seedbank
Feb 2017
seeds/m2

Seedbank
Feb 2018
seeds/m2

Diverse 865b 449b 145c 250c
Aggressive 556b 253b 573b 898b
Conservative 2276a 2830a 4188a 7406a
P value 0.003 <0.001 <0.001 <0.001
Transformation required # * # #

* No lsd - data analysed by square root and back transformed. Letters indicate significant difference.

# No lsd - data analysed by log e and back transformed. Letters indicate significant difference.

Table 11. Main effect of management strategy x opener type (disc and tine) on annual ryegrass seedbank for at Temora, NSW, 2014-2017.

Management strategyOpener Feb 2014
seeds/m2
Feb 2015
seeds/m2
Feb 2016
seeds/m2
Feb 2017
seeds/m2
Feb 2018
seeds/m2
Diverse Tine 1864 734cd 346c 82 204
Aggressive Tine 1864 866c 300c 498 846
Conservative Tine 1864 1291b 1840b 2322 4188
Diverse Disc 1864 1020c 562c 260 302
Aggressive Disc 1864 356d 207c 659 953
Conservative Disc 1864 4008a 4045a 7631 13095
P value - - <0.001 0.023 0.345 0.212
Transformation - - # * # #

*No lsd - data analysed by square root and back transformed. Letters indicate significant difference.

#No lsd - data analysed by log e and back transformed. Letters indicate significant difference.

Section 2: Whole farm analysis 2014-2017

Part A: Whole farm analysis based upon labour, plant and equipment units being matched to the scale of the business

Management systems

Over the four phased years, the Aggressive and Diverse management strategies generated net profits of $440/ha and $450/ha in both the 3000ha and 5000ha 2013 scenarios regardless of opener type (Tables 12, 14 and 16). The Aggressive and Diverse management strategies produced an increase in profit of $140/ha compared to the Conservative strategy (Tables 12, 14 and 16). In all years the Conservative strategy provided the lowest returns regardless of opener type, even though it had the lowest enterprise expenses (Tables 12 to 17). The cost of production was lowest in the Diversified strategy in all three scenarios (approximately 13% lower) with 18% reduced fuel costs (Tables 12, 14, 16). Depreciation was always lowest in the Diversified strategy (Tables 13, 15, 17).

In two of the four phased years (2014 and 2017), the profits were significantly lower in the Conservative strategy relative to the alternative strategies with a disc opener significantly reducing the four-year average financial performance compared to that of the tine opener.

Table 12. Scenario 1 (3000ha) – Income, expenses and EBIT averaged across the whole farm for each management strategy by opener type ($/ha) and cost of production ($/t).

Management
strategy

Opener

Gross
income
($/ha)

Enterprise
expenses
($/ha)

Cost of
production
($/t)

Total fuel
costs
($/ha)

Average
EBIT
($/ha)

Aggressive

Tine

$1004

$434

$182

$25

$440

Conservative

Tine

$893

$372

$188

$25

$392

Diverse

Tine

$971

$405

$161

$21

$439

Aggressive

Disc

$982

$432

$182

$23

$419

Conservative

Disc

$684

$357

$251

$23

$196

Diverse

Disc

$959

$406

$158

$19

$425

Table 13. Scenario 1 (3000ha) – Total Income, expenses, gross margin, overhead costs, EBIT and depreciation for each management strategy by opener type for the whole farm ($).

Management
strategy

Opener

Gross
income

Enterprise
expenses

Gross
margin

Overhead
costs

EBIT
($)

Depreciation

Aggressive

Tine

$3,010,674

$1,303,435

$1,707,240

$387,178

$1,320,062

$88,059

Conservative

Tine

$2,679,067

$1,116,852

$1,562,215

$386,828

$1,175,387

$87,709

Diverse

Tine

$2,913,239

$1,215,054

$1,698,185

$379,854

$1,318,331

$80,732

Aggressive

Disc

$2,945,230

$1,296,115

$1,649,114

$391,775

$1,257,339

$92,656

Conservative

Disc

$2,051,475

$1,071,862

$979,613

$391,425

$588,188

$92,306

Diverse

Disc

$2,876,995

$1,219,220

$1,657,775

$384,132

$1,273,643

$85,010

Table 14. Scenario 2 (5000ha) – Income, expenses and EBIT averaged across the whole farm for each management strategy by opener type ($/ha) and cost of production ($/t).

Management
strategy

Opener

Gross
income
($/ha)

Enterprise
expenses
($/ha)

Cost of
production
($/t)

Total
fuel costs
($/ha)

Average
EBIT
($/ha)

Aggressive

Tine

$1,004

$427

$176

$23

$457

Conservative

Tine

$893

$365

$182

$23

$409

Diverse

Tine

$971

$398

$155

$19

$457

Aggressive

Disc

$982

$424

$177

$25

$437

Conservative

Disc

$684

$350

$242

$25

$214

Diverse

Disc

$959

$399

$152

$21

$443

Table 15. Scenario 2 (5000 ha) – Total Income, expenses, gross margin, overhead costs, EBIT and depreciation for each management strategy by opener type for the whole farm ($).

Management
strategy

Opener

Gross
income

Enterprise
expenses

Gross
margin

Overhead
costs

EBIT
($)

Depreciation

Aggressive

Tine

$5,017,791

$2,135,510

$2,882,281

$596,448

$2,285,833

$151,550

Conservative

Tine

$4,465,111

$1,824,575

$2,640,536

$595,742

$2,044,794

$150,845

Diverse

Tine

$4,855,398

$1,988,236

$2,867,161

$579,884

$2,287,278

$134,982

Aggressive

Disc

$4,908,716

$2,122,471

$2,786,245

$601,858

$2,184,387

$156,960

Conservative

Disc

$3,419,126

$1,748,753

$1,670,373

$601,152

$1,069,221

$156,255

Diverse

Disc

$4,794,992

$1,994,340

$2,800,652

$584,582

$2,216,070

$139,680

Table 16. Scenario 3 (3000ha in 2018) – Income, expenses and EBIT averaged across the whole farm for each management strategy by opener type ($/ha) and cost of production ($/t).

Management
strategy

Opener

Gross
income
($/ha)

Enterprise
expenses
($/ha)

Cost of
production
($/t)

Total
fuel costs
($/ha)

Average
EBIT
($/ha)

Aggressive

Tine

$1,004

$438

$184

$26

$434

Conservative

Tine

$893

$376

$190

$26

$385

Diverse

Tine

$984

$409

$162

$23

$446

Aggressive

Disc

$1,033

$435

$175

$25

$466

Conservative

Disc

$719

$359

$240

$25

$228

Diverse

Disc

$998

$409

$153

$21

$460

Table 17. Scenario 3 (3000 ha in 2018) – Total Income, expenses, gross margin, overhead costs, EBIT and depreciation for each management strategy by opener type for the whole farm ($).

Management strategy

Opener

Gross
income

Enterprise
expenses

Gross
margin

Overhead
costs

EBIT
($)

Depreciation

Aggressive

Tine

$3,010,674

$1,313,287

$1,697,387

$396,611

$1,300,776

$97,492

Conservative

Tine

$2,679,067

$1,126,705

$1,552,362

$396,261

$1,156,102

$97,142

Diverse

Tine

$2,952,225

$1,226,021

$1,726,204

$389,286

$1,336,918

$90,164

Aggressive

Disc

$3,098,723

$1,303,957

$1,794,766

$395,536

$1,399,230

$96,417

Conservative

Disc

$2,156,680

$1,078,369

$1,078,311

$395,186

$683,125

$96,067

Diverse

Disc

$2,993,745

$1,225,815

$1,767,931

$387,893

$1,380,038

$88,771

The range in income between crops was over $500/ha while the range in expenses was $90/ha (data not shown). Canola was the most profitable crop in the rotation, exceeded the next best performing crop (barley) by $200/ha. Wheat at plant densities of 150 plants/m2 generated profits $175/ha higher than wheat at 80 plants /m2 regardless of whether wheat followed a break crop or a wheat crop. However, in the Diversified strategy, wheat following vetch sown at 80 plants/m2 was the third most profitable crop behind barley. The second wheat crop in the canola-wheat-wheat sequences generated profits $30/ha lower than wheat following canola. Differences in crop profits were driven primarily by differences in income. Yield was the primary driver of income with quality a secondary factor.

Figure 1. Scenario 2 whole farm return on assets managed (Management Strategy by Opener type).

When seeding opener types were compared, the tine opener generated the highest returns on assets managed across all years (6.3% compared with 5.5%), with the highest average return produced in scenario 2 in the Diverse strategy (6.9% compared to 6.6% in disc). The Conservative strategy generated lower returns regardless of seeding system, however the disc opener generated only half the returns on assets managed of the tine seeder in this strategy (Figure 1). When comparing the return on assets where the annual ryegrass was successfully controlled with expensive herbicides/strategies.

Tine retuen higher for all years, 2016 tine return was considerably higher

Figure 2. Whole farm operating return on assets managed (Opener type by Year).

Averaged across Aggressive and Diverse strategies in scenario 1 and 2, there was little difference with between disc and tine openers (6.76 tine compared with 6.3% disc). Interestingly, in scenario 3 (2018), where narrower row spacings and increased crop yields have been factored into the disc opener whole farm analysis, the average return on assets has increased to 6.7% in the disc compare with 6.3% in the tine (data not shown). With the exclusion of the Conservative strategy, the four-year average returns of the tine opener exceeded those of the disc system by 0.3%. In two of the four years the returns of the tine system exceeded the disc system (Figure 2). The magnitude of the difference in returns in these years was greater than the magnitude of the difference in the years when the disc outperformed the tine system.

There were no significant differences in machinery costs per hectare between strategies with different seeders. The main reason for this was that most of the plant and equipment remained constant between strategies with the exception of the seeder. Any differences in machinery costs were a reflection of differences in tractor and seeder costs, systems treatments and use of machinery between strategies.

The lower cost of fuel in the disc seeding system relative to the tine seeding system (Tables 12, 14 and 16) was more than offset by the higher depreciation, repairs and maintenance and insurance costs. This led to marginally higher machinery costs for the disc seeding system relative to the tine seeding system in scenarios 1 and 2, but not in scenario 3. The reason that scenario 3 had lower disc costs relative to tine costs was that it factored in the higher cost tined implement (parallelogram seeder), compared to the cheaper flexi-coil, and the disc with row spacing of 190mm had the potential to increase crop yield, using the information in Tables 4 and 5.

2014 and 2017 - diverse had highest return, 2015 and 2016 Aggressive had highest return. Conservative had lowest return over all years.

Figure 3. Whole farm profitability – Return on assets managed (Management strategy by Year).

When the performance of the whole farm was examined, the main differences between the strategies by opener types related to differences in income. There is little effect of differences in overhead cost structure in this analysis because each system is assumed to have a highly efficient cost structure (Tables 13, 15, 17). This efficient cost structure is facilitated by matching machinery investment to the assumed scale of the business.

Whole farm operating returns on assets managed for the four-year period of the trial averaged 6.7% for the Aggressive and Diverse strategies. The Aggressive strategy had greater volatility in returns compared to the Diverse strategy with more upside in 2015 and 2016 and more downside in 2014 and 2017 (Figure 3). Similarly, the Conservative strategy had more downside in the drier years of 2014 and 2017, but less upside in the remaining years than either of the two alternative strategies.

There is little economic incentive for managing a Conservative strategy regardless of seeder. Disc seeders generated far lower returns in the Conservative strategy relative to tine seeders.

Part B: Impact of a less efficient cost structure on the whole farm analysis

In Section 2, Part A, the whole farm analysis that was based upon the labour, plant and equipment units being matched to the scale of the business in an attempt to drive cost efficiencies. However, in order to demonstrate how sub-standard scale can reduce profitability, a less efficient whole farm analysis was run on a 1500ha scale compared to the 3000ha scale (Section 2, Part B).

Reducing farm scale from 3000ha to 1500ha resulted in a $70/ha increase in costs, of which $45/ha is related to increased machinery costs. The remainder of the difference is related to increased overhead and labour costs per hectare. Thus all of the difference in profit (EBIT) is related to the higher costs of running the same machinery on a 1,500ha farming system compared to a 3,000ha system.

Profitability is compromised by a greater magnitude than is profit. At a whole farm level, profitability is measured as return on assets managed (ROAM). ROAM is calculated when EBIT is divided by the total value of farm assets managed. Due to the same capital value in plant and equipment being distributed over fewer hectares, the total value of assets under management increases by a further $740/ha where 1,500ha is farmed compared to 3,000ha. The combination of lower EBIT and higher asset value per hectare results in a decrease in return on assets managed by 1.5%. Thus, in relative terms decreasing scale by 50% but retaining the same plant and equipment results in a reduction of profit of 18% and a reduction in profitability by 25%. i.e. Reduction in profit:70 divided 393 = 18%. Reduction in profitability: 1.5% divided 5.7% =25% (Table 18).

Table 18. The differences in expenses, EBIT and Return on Assets Managed (ROAM) at two farm scales, using the results from the four phased year of the experiment.

Farm scale
(area/ha)

Labour units

Land assets
($/ha)

Total assets
($/ha)

Overhead expenses
($/ha)

Enterprise expenses
($/ha)

Machinery
($/ha)

EBIT
($/ha)

ROAM
(%)

1500 ha

1

$6175

$7651

$182

$416

$146

$323

4.2%

3000 ha

2

$6175

$6913

$135

$392

$101

$393

5.7%

Difference ($/ha)

- - -

$47

$24

$45

-$70

-1.5%

Discussion

In this paper, the effect of three management strategies by two seeder types on weeds, crop yields and profitability at several scales (nett margins at experiment scale and at the whole farm scale from three scenarios – 3000ha, 5000ha and 3000ha in 2018) was examined. Two canola-wheat-wheat sequences were compared against a Diversified sequence (canola-wheat-barley-vetch for hay). One was aggressively managed for weed control and to maximise yield which included more crop competition, more expensive herbicides, the inclusion of a hybrid RR canola and higher rates of N at sowing (deep banded in tine opener only) against a conservatively managed sequence with cheaper herbicides, lower crop densities, lower rates of N at sowing and cheaper crop types. The third comparison, a Diverse cropping strategy allowed each crop to be sown into a less antagonistic stubble i.e. wheat into canola, barley into wheat, vetch into barley and cut for hay followed by, canola sown into low stubble load.

Although the vetch hay treatment was not as profitable as other crops, it provided excellent weed control, additional N and increased water conservation, that proceeded the extremely high value double break canola crop that was the most profitable crop to make the Diverse strategy a reliable, profitable management option for growers wanting to retain stubble. The double break combined with the crop competition from the barley crop was extremely effective at reducing ARG seedbank to below that of the Aggressive canola-wheat-wheat sequence under extremely wet and dry seasonal conditions when sown with a disc or tine opener. In comparison, the Conservative management strategy was reasonably profitable when sown with a tine opener, but was largely ineffective at reducing the ARG seedbank.

The ability to apply trifluralin as a pre-emergent herbicide with a tine opener reduced the ARG seedbank compared to the Conservative strategy sown with a disc opener, however, the Conservative strategy would not be recommended with either opener type where there is any ARG weed problem. When comparing the three management strategies, there is no economic case for pursuing a Conservative strategy over either the Aggressive or Diverse management strategies when analysing across the whole farm. Although there was little difference between the Diverse and Aggressive strategies in terms of profitability, the Aggressive strategy was more volatile (risky).

When determining profit across the whole farm analysis, although the tine opener generated the highest returns, especially in the 2013 scenarios, there was little difference between the Aggressive and Diverse strategies.

The average profit (EBIT) determined from the small farm experiment was $454/ha, $328/ha and $477/ha in the Aggressive, Conservative and Diverse management strategies. However, when comparing these results to the profit (EBIT) in the whole farm analysis Scenario 1 (3000ha scenario in 2013), the profit had reduced in all strategies and there was no difference between the Diverse and Aggressive strategies ($430/ha in Aggressive compared with $432/ha in Diverse). However, it needs to be recognised that the Diverse strategy was more effective at reducing the ARG weed seedbank across a range of seasons and combined with the reduced volatility, should be considered as a profitable and sustainable management strategy for growers wanting to retain stubble in their farming system.

Scenario 3 was included to examine what potential effect changes in farming systems between 2013 and 2018 may have on profit across the whole farm. For those growers who have moved to a farming system using a disc seeder with reduced row spacings to 190mm and control weeds, the result is positive with the average return on assets increasing from 6.3% to 6.7%. Conversely, the change from a flexi-coil seeder to the more expensive parallelogram with slower seeding speed reduced ROAM from 6.7% to 6.3%. The results need to be verified with replicated experiments that include a complete disc systems approach. It must be acknowledged that these whole farm analysis scenarios were setup so that the labour, plant and equipment were matched to the scale of the business. However, this is not always the case across the farming sector.

This paper examined the effect a farm operated with a less efficient cost structure had on profit and profitability (ROAM). Where the agronomy on-farm is managed at a high level, there can be a significant reduction in ROAM if the farm structure is not also managed at a high efficiency. Over-capitalising on machinery or not having the most efficient scale of machinery to farm size, can result in a significant reduction in ROAM. In our example, profitability was reduced by 25% where the assets managed at the 3000ha scale were similarly managed at the 1500ha scale. Although this is a stark comparison, the main point here is that the farming enterprise needs to be operating at a high level of efficiency to gain the greatest benefits of changing management strategies and then tweaking the system with different seeding openers.

Conclusion

It is extremely important for growers NOT to compromise managing weeds, disease or being able to sow their crop in a timely manner due to excessive stubble loads. Growers need to be pro-active in managing their stubble and their crop sequence to suit their seeding system. It has been shown that by moving to a Diversified management strategy that incorporates a double break of a pulse crop followed by canola, and barley instead of a second wheat crop offers a profitable farming system with reduced N costs that is effective at controlling weeds. The Diversified strategy was also the least volatile when analysed across the whole farm. For growers using tine openers, results show that they can retain their stubble in most years moving to a Diversified strategy, and they will also avoid a reduction in profit when growing barley after wheat instead of wheat after wheat.

One of the important results from this paper, is the effect of matching the scale of the farm to the labour/plant and equipment units. When the scale is correctly matched, the greatest impact on whole farm income is determined by crop yield. However, when not correctly matched, both profit and profitability can be significantly reduced.

Acknowledgments

The authors would sincerely like to thank the growers who provided information on farm equipment, labour and costings that was used to underpin the assumptions for the farm analysis. We would especially like to acknowledge Jason Coleman, Ben Cruickshank, Peter Harper, Warrick Holding, Derrick Ingold, Michael Sinclair, John Stevenson and Greg Condon (Grassroots Agronomy). Without their knowledge, attention to economic and agronomic detail and their willingness to assist us better understand real farm economics, the value of the whole farm analysis would have been significantly reduced.

The research undertaken as part of this project is made possible by the significant contributions of growers through both trial cooperation and the support of the GRDC — the authors would like to thank them for their continued support.

We would also like to acknowledge all the collaborating scientists, technicians, staff, growers and consultants from all of the organisations and groups who have contributed significantly in terms of their time and research capability to the FarmLink/CSIRO stubble management project over the past five years to ensure the project is producing the highest quality of work.

Useful resources

Maintaining profitable farming systems with retained stubble project

References

GRDC GroundCover Supplement Issue 135: July-August.

B Scott (2013): Stubble retention in Southern Australia, EH Graham Centre Monograph No 1

Scott, Podmore, Burns, Bowden and McMaster (2013) Developments in stubble retention in cropping systems in southern Australia (2013). (Report to the GRDC by NSW DPI).

Charles Sturt University publication

Swan et al (2017)a Maintaining profitable farming systems with retained stubble across various rainfall environments in SA, Victoria and central and southern NSW. GRDC Updates in Adelaide, Wagga and Bendigo.

Swan et al (2017)b A flexible approach to managing stubble profitably in the Riverina and Southwest Slopes of NSW. GRDC Update Grenfell.

Contact details

Tony Swan
CSIRO Agriculture and Food,
Clunies Ross St,
Acton ACT 2601
0428145085
tony.swan@csiro.au
@tony_swan64

GRDC Project code: CSP00174