Profit overrides yield in crop goals
GroundCover™ Issue: 120 | Author: Melissa Williams
With post-harvest farm budgeting in full swing, it is worth noting that in every cropping region of Western Australia there is a group of high-performing business managers who consistently produce better-than-average returns on investment – from the same environment and rainfall.
In the low-rainfall eastern wheatbelt, where cropping profitability is a key R&D priority, the GRDC’s Kwinana East Regional Cropping Solutions Network (RCSN) is delving into the factors that drive these top operators.
It is funding a business profitability case study project, which includes a profile of innovative Tammin grain producers Brad and Kate Jones.
Case study project
Operating with tight margins, variable climate and fluctuating commodity prices has put Brad and Kate’s focus firmly on generating whole-system profits relative to risk – rather than concentrating solely on maximising crop yields.
Their aim is to achieve sustainable margin growth through business scale, reducing fixed costs and using the latest technologies to achieve input and grain storage efficiencies.
Marketing strategies are centred on increasing prices received for grain and taking advantage of supply chain opportunities.
Brad says the business is not about using low inputs, but managing fertiliser and other inputs to the highest level of costs possible to still achieve a profitable outcome.
He and Kate have expanded their property ‘Bungulla’ from 3373 hectares in 2007 to 11,000ha using a lease and follow-on purchase approach.
Their property is triple the size of the average farm in their port zone and this scale of operation is:
- generating efficiencies in machinery use;
- reducing weed and pest issues;
- allowing for economic aerial fertiliser, herbicide and fungicide applications; and
- improving salinity control.
Brad and Kate use wide-ranging and incorporated technologies across their farming system, including:
- GPS, auto-steer and yield data collection at harvest;
- GPS and auto-steer on tractors;
- GPS flow control on the farm’s turbine aeroplane;
- spatial soil mapping tools; and
- predictive yield models.
In 2008 they decided to concentrate resources on weed control and improving soil pH as these were identified as the biggest threats to grain productivity on their property.
This led to the introduction and integration of GPS, yield mapping, camera recognition and soil mapping using gamma-ray radiometrics, spectrometry and electromagnetic induction.
Brad says the combined data from these systems has significantly reduced herbicide and fertiliser use and application time, and led to the introduction of “almost-controlled-traffic farming and tramline systems”.
Overlaying soil maps with yield data has allowed the creation of paddock zones and use of variable-rate, soil-specific prescription fertiliser blends, and lime and herbicide-prescription maps.
“We are identifying the areas of the farm that will respond most profitably to the ‘prescription’ and, therefore, justify the investment,” Brad says.
“For example, WeedSeeker® technology on the boomspray has cut spray use on some paddocks to as low as 10 per cent of previous levels.”
Brad says almost 100 per cent of fertiliser is applied as a liquid and nutrient mixes are tailored to a range of subsoil constraints and used at low rates.
He describes this as a balanced, versus volume, nutrition system and estimates it increased wheat net margins by about 20 per cent in 2013 and 2014.
“Using liquid products, we can sow up to 600ha of crop per day, which is about 100ha/day faster than we could achieve with granular fertiliser and has cut our total seeding time to about 15 days if the weather is good,” he says.
“This means we could put in another 1200ha of crop – if land became available – in the optimal sowing window using the same amount of equipment.”
Fungicides and herbicides can be applied from Brad’s aeroplane, which is also leased to other local growers to spread its cost base.
About 35 per cent of the ‘Bungulla’ crop program is dry-sown each year and, as the season unfolds, paddocks are ranked and dropped off to fallow if rains are not forthcoming. Break crops, mostly field peas and canola, and fallow make up about 30 per cent of farm area each season.
Oaten hay is grown for weed management, mitigating frost risk and achieving high returns in its own right.
A variable-rate liming program is carried out each year and trials in 2014 and 2015 to incorporate lime to depth using deep-ripping are looking promising, Brad says.
He says the overall approach to soil health at ‘Bungulla’ is driven by improving plant-available moisture, not by concentrating solely on nutrient application.
Central to this is a spray fallow that allows incorporation of rainfall into soil moisture from harvest (year one) to seeding 16 months later (year three).
Brad says a range of broad-scale herbicides are used in the fallow to remove herbicide-resistant weeds to make way for dry sowing when the paddock returns to production, typically in a rotation of fallow/cereal/cereal/canola and hay/legumes.
In addition to the weed control benefits, there are fallow benefits in a cereal crop root and fungal disease break and better crop vigour.
Grain storage and marketing
‘Bungulla’ has the capacity to store 7000 tonnes of grain, or about 40 per cent of the annual crop produced, and this enterprise is expanding.
About 4000t of storage is aerated and silos are fitted with technology to allow quality analysis, aggregation and blending of high and low-protein grain to optimise returns. Brad says harvest is now a 24-hour operation, no longer restricted by receival-point opening hours or poor weather, and can be carried out with one farm-owned harvester (plus one contract harvester).
There is ability to store grain for delivery later in the year and this has led to efficiencies in back-loading fertiliser and lime for ‘Bungulla’ or other local farms.
Other benefits of the on-farm storage include insect control, overcoming falling numbers and other potential grain quality downgrade issues, and reducing the risk of weather damage to the crop – which, in turn, has slashed insurance premiums.
‘Bungulla’ has a quasi-board management structure and uses private consultants for business management, agronomy and grain marketing.
Brad runs three years of budgets consecutively and any adjustments made in one year filter through the three-year figures.
The budget focus is on break-even points and managing to targets for return on capital.
For the Jones family, longer-term business priorities are to continue implementing new technologies to drive efficiency gains, training staff to higher levels to operate increasingly sophisticated machinery and further developing infrastructure through the grain supply chain.
More information:Brad Jones,
0427 632 244,
Julianne Hill, GRDC RCSN,
0447 261 607,
GRDC Regional Cropping Solutions Networks
GRDC Farm Business Management Hub
GRDC Farm Business Update
GRDC Project Code CIC00027