Economic analysis of benefits from grazing unharvested standing lupin crops in a mixed farm enterprise in south-west Western Australia
Amelia Gooding
A , Serina Hancock A B , Andrew Thompson A B and John Young A C *
A
B
C
Handling Editor: Ed Charmley
Abstract
In the south-west of Western Australia, weaned lambs typically graze dry annual pastures and crop stubbles during late spring, summer and autumn (October–March). The low energy and protein content of these feeds typically means that lambs are supplemented with concentrates to achieve target growth rates. Fully mature, standing lupin crops that could be harvested may provide higher quality feed than dry pasture and crop stubbles over this period.
This study tested the hypothesis that the incorporation of standing lupin crops for grazing will increase whole-farm profitability. Furthermore, we aimed to quantify the relative contributions of stocking rate, sale value of lambs, weaner survival rate and ewe lamb reproduction to this increase in farm profit.
Whole-farm bioeconomic modelling was used to assess the profitability of grazing standing lupin crops in a mixed farming system. An analysis was conducted for a representative mixed farm in south-west Western Australia with a self-replacing Merino flock, and the profitability of grazing a lupin crop was assessed on the basis of whether it was harvested or grazed. A sensitivity analysis was then carried out to test the robustness of the results and understand the role of standing lupin crops in a mixed farming system.
Grazing lupins grown on 7% of the total farm area increased whole-farm profitability by almost A$30,000 or A$200/ha of standing crop. In this environment, across a range of assumed crop yields and prices, it was always more profitable to graze standing lupins rather than harvest the lupins. The increase in profit was primarily due to an increase in stocking rate of 1.2 dry sheep equivalent per hectare when able to graze the optimum area of standing lupins compared to when there was no standing crop. In addition to the increase in stocking rate, revenue from sheep sales increased, with the Merino wether and mixed sex crossbred weaners sold for an extra A$13 per lamb when stocking rate was constrained to the optimum for when there was no standing lupin crop.
This analysis demonstrated that in the south-west of Western Australia, grazing standing lupin crops was always more profitable than harvesting the grain.
If lupins are included in crop rotations in this environment, profit will be increased if they are grazed, but it is also clear that stocking rate should be increased to fully capitalise on potential gains in farm profit.
Keywords: Australian Farm Optimisation model, farm modelling, fodder crop, livestock profit, mixed farming system, sheep, stocking rate, weaners.
Introduction
In the south-west of Western Australia, weaned lambs typically graze dry annual pastures and crop stubbles during late spring, summer and autumn (October–March). The low energy and protein content of this feed, together with limited amount of feed available in some years, typically results in a considerable number of lambs failing to reach their potential growth rates without supplementation (Gardner et al. 1993; Doyle et al. 1995). Poor early growth rates can contribute to weaner ill-thrift and mortality (Hatcher et al. 2008; Campbell et al. 2009; Thompson et al. 2011). In addition, a failure to attain high growth rates will restrict the ability to sell lambs at target liveweights for slaughter during summer/autumn or reduce the ability to mate ewe lambs at 7–9 months of age (Rosales Nieto et al. 2013; Thompson et al. 2019). This highlights the need to design forage systems capable of providing higher quality feed during the post-weaning period to enhance overall flock productivity and profitability.
Perennial pastures such as lucerne, longer-season legume pastures including biserrula (Biserrula pelecinus), French serradella (Ornithopus sativus) and bladder clover (Trifolium spumosum), and unharvested standing oat, wheat and barley crops have all demonstrated their effectiveness to provide higher quality feed for lambs post-weaning (Bathgate et al. 2009; Byrne et al. 2010; Monjardino et al. 2022). Standing crops that are able to be grazed are commonly grown in winter cropping rotations in south-west Western Australia; however, both lucerne and the longer-season legume pastures require specific management, limiting their adoption (Bell and Moore 2012). While grazing standing cereal crops is rarely profitable when grain prices are higher than average or yields are above 1.5–2.0 t/ha (Bell et al. 2009), this may not be the case for grazing standing lupin crops. Lupin crops grown in these environments often have a lower grain value per hectare, but their value to the farming system is increased due to nitrogen (N) fixation and weed, pest and disease management (Pannell 1995; Mrunalini et al. 2022). Moreover, because the protein content of lupins (26.9–31.9%, Kim et al. 2009) is higher than cereals (9.6–15.5%, Ovenell-Roy et al. 1998), they are more suited to meet the nutritional requirements of growing weaners. Warner et al. (1998) reported that grazing crossbred lambs near Northam in Western Australia on a standing lupin crop from December to January produced a higher gross margin per hectare than if the lupins were harvested. However, this simple gross margin analysis was unable to capture the benefit on the whole-farm system. Thus, a comprehensive whole-farm bioeconomic analysis is needed to evaluate the role of grazing standing lupin crops for mixed farming systems in south-west Western Australia.
Farm system models have previously been used to evaluate opportunities to manipulate the feed base on mixed farms across a range of environments (Bell et al. 2009; Harrison et al. 2014, Watt et al. 2023). In this study, the Australian Farm Optimisation (AFO) model was chosen as it is targeted to the region of interest and has a highly developed feed budgeting module (Young et al. 2024). Using a representative mixed sheep and crop enterprise in the high-rainfall region of south-west Western Australia, we hypothesised that the incorporation of standing lupin crops for grazing will increase whole-farm profitability. Furthermore, we aimed to quantify the relative contributions of stocking rate, lamb sale value, weaner survival rate, and ewe lamb reproduction to this increase in farm profit.
Methods
Model and rationale
The AFO model employed in this analysis is a refined version of MIDAS (Model of an Integrated Dryland Agricultural System), a linear programming model with a dual focus on the economics and biology of farming systems (Pannell 1995). For a comprehensive overview of the AFO model, refer to Young et al. (2024). The AFO model represents the entire farm system, accommodating for diverse resource availabilities, such as capital, finance, soils, labour, livestock and machinery. This approach facilitates the evaluation of interactions between enterprises (e.g. grazing of standing crops) and between land uses (e.g. cereal crop utilisation of N fixed by previous legume crops or pasture). The model calculates the optimal mix of land uses and rotations, animal management, labour and machinery utilisation. The feed budget tool within the AFO allows for greater examination of the feed utilisation and can analyse the trade-off between different feed sources and different classes of animals. The AFO model is capable of stochastic analysis integrating season and price risk. However, this study confines its application to the steady state mode assuming an average year. The objective of the AFO model is to maximise whole-farm profit, enabling users to assess farm management strategies under typical conditions and any specified constraints. For this analysis, the Great Southern Regional version of AFO was employed after the value of grazing stubble and standing crops were updated as described below.
Key features of the base farm modelled
For this analysis, the model was calibrated to represent a medium size mixed farm enterprise in the Darkan region in the south-west of Western Australia (33.3345°S, 116.7331°E), with a Mediterranean climate and an average rainfall of 675 mm, of which two thirds typically falls between May and October. The farm enterprise operates with two full-time and one part-time staff, with a casual during busy periods. A summary of the key characteristics of the farm are provided in Table 1. The base farm does not grow lupins. The farm runs a self-replacing, medium wool Merino flock with a proportion of the Merino ewes mated to a terminal sire and the remaining mated to a Merino sire. The age structure assumptions and price assumptions for the flock are listed in Tables 2 and 3.
| Farm characteristic | Unit | |
|---|---|---|
| Farm size (ha) | 2253 | |
| Area of annual subclover/ryegrass pasture (%) | 60 | |
| Number of land management units (LMUs) | 6 | |
| Canola yield (t/ha) A | 0.95–1.9 | |
| Barley yield (t/ha) A | 1.8–3.6 | |
| Oat yield (t/ha) A | 1.8–3.6 | |
| Lupin yield (t/ha) A | 0.9–1.8 | |
| Productivity of pasture (t DM/ha) | 7.9 | |
| Merino standard reference weight (kg) | 55 | |
| Fibre diameter of adult Merino ewes (μm) | 20.7 | |
| Greasy fleece weight of adult Merino ewes (kg) | 5.0 | |
| Adult lamb marking rate (%) | 88 | |
| Time of lambing | June/July | |
| Assumed nitrogen fixation of lupins (units of N kg/ha) | 35 |
| Selling options | Description | |
|---|---|---|
| Finished lamb A | Sold at any time when the lamb reaches either 45, 48, or 51 kg | |
| Store lamb A | Sold at either 4, 6 or 8 months of age, depending on fat score and weight | |
| Hogget | Sold at 18 months of age, after shearing | |
| Retained | Option to keep the lambs and sell as an adult | |
| Cast for age ewe | Sold at either 5 ½ or 6 ½ years, after shearing |
| Commodity | Price (A$) | |
|---|---|---|
| Finished lambs (A$/kg carcase weight) A | 6.25 | |
| Store lambs (A$/kg carcase weight) | 4.30 | |
| Breeder ewe (A$/hd) | 137 | |
| Wool price (A$/kg) B | 9.27 | |
| Lupin price (A$/t fed out) C | 335 | |
| Oat price (A$/t fed out) C | 240 |
Prices used were based on the 70th percentile prices for meat and wool, and the 50th percentile prices for grain over the period 2004–2020 (Mecardo 2023). The higher percentile for meat and wool was selected to account for the upward trend in the prices observed in the period leading up to this analysis.
Grazing value of stubble and standing crop
The feed quality and quantity assumptions for stubble and standing crop in the AFO model were updated using data collected from eight grazing trial sites in south-west Western Australia. Harvested barley, wheat and canola stubble were used at six of the trial sites. Adult ewes grazed the stubble in December and January at five of the sites with the remaining stubble site grazed in March and April. Average stocking rate was eight dry sheep equivalent per hectare (DSE/ha), with harvested yield measured at each site. The remaining two sites were standing lupin crops. Weaners grazed the standing crops from mid-October to late November 2023 and stocking rate ranged from 32 to 41 lambs/ha across the two sites. Grain available for grazing was measured from either the harvested yield of a proportion of the paddock prior to grazing or collection and weighing grain within 20 randomly placed quadrats (0.1 m2) per paddock. The adult ewes and weaners were weighed at least monthly, with a minimum of three weights recorded at each site.
The liveweight change of weaners grazing stubble and standing lupin crops from the trial sites were incorporated into the AFO model, following the approach used by Thomas et al. (2014). Liveweights were transformed into a continuous function by fitting a quadratic equation to the liveweights (LW) and the number of grazing days (GD) since grazing commenced (LW = a GD2 + b GD + c). This approach, with grazing days as the independent variable instead of the date, accommodates the impact of different stock numbers and enables the inclusion of trials with varying stocking density. The estimation of daily liveweight change, starting at the beginning of the grazing period and using the quadratic function fitted to the measured liveweights from the trial sites, allows the quantity and quality of the feed consumed to be back-calculated on a daily basis using an approach based on Thomas et al. (2009). The AFO stock generator was used to estimate liveweight change, metabolisable intake, and dry matter intake of animals grazing a range of different quality feed offered ad libitum. This was carried out using the same class and liveweight of stock assessed and commenced on the date that grazing began in the trial. The actual liveweight change of the animals, derived from the fitted quadratic function, was compared to the predicted liveweight change from the AFO stock generator, which allowed the quality, metabolisable energy intake and dry matter intake of the standing crop and stubble being grazed to be inferred. The total quantity of standing crop and stubble consumed was calculated by summing the daily intake, multiplied by the stocking rate across a suitable period. Fitting a quadratic function to the liveweight pattern enabled the extension of feed intake and quality calculations beyond the conclusion of the grazing trials.
The estimated standing crop and stubble available was split into 10 categories on the basis of nutritive value for the linear programming component of AFO, and the amount of each category was calculated as a proportion of the total crop biomass, which was estimated from crop yield and harvest index for lupins. These proportions are used in the AFO model multiplied by the grain yield of the selected crop, where yield varies across land management units and rotations. The maximum possible liveweight gain of the weaners grazing standing lupin crop and stubble that was incorporated into AFO using the model crop yield assumptions is detailed in Table 4. The maximum liveweight gain per hectare was calculated in four steps: (1) derive maximum liveweight for the individual animals in the trial from the quadratic equation (when the derivative of the equation is zero); (2) calculate liveweight gain per head by subtracting the initial liveweight; (3) calculate maximum liveweight gain per hectare in the trial by multiplying by the stocking density (hd/ha) in the trial; and (4) scale the maximum trial liveweight gain by the AFO crop yield relative to the measured crop yield in the grazing trial. This maximum liveweight gain per hectare can be realised in the model solution as either a low stocking density with greater gain per head or a high stocking density with lower gain per head.
| Crop type | Stubble (kg/ha liveweight gain) | Standing crops (kg/ha liveweight gain) | |
|---|---|---|---|
| Barley | 32 | n/a | |
| Oat | 23 | n/a | |
| Lupin | 26 | 335 | |
| Canola | 26 | n/a |
Analysis
The AFO model was used to determine the increase in whole-farm profit of the base farm, modelled with the introduction of standing lupin crops. Whole-farm profit is profit at full equity before tax, minus the opportunity cost of capital. Standing crop refers to fully mature harvestable crop that was able to be grazed in the model once harvest commences in November until the end of March. The standing crop was managed throughout the growing season as if it was to be harvested. Initially, the AFO was run with a broad range of lupin standing crop areas to determine the optimum area to grow on the base farm modelled, while retaining the same proportion of the farm sown to crop. The optimum area of lupin standing crop, rounded to the nearest 50 ha, was then compared to the base farm with feed supply from mixed ryegrass (Lolium rigidum) and subterranean clover (Trifolium subterranean) annual pasture and canola, barley and oat crop stubbles. The base farm modelled included an underlying assumption of 35 kg of N per ha fixed by the lupin crop, with a corresponding reduction in N applied to the following year’s crop. The influence of the assumed N fixation per ha on the profitability of the base farm was tested, with N fixation set to 0, 35, and 50 kg N/ha and a corresponding reduction in N applied to subsequent crops, with no change in crop yield. Unkovich et al. (1994) reported that N fixation from lupin crops grown in the south-west of WA varied from 32 to 96 kg N/ha.
To further examine the robustness of the results under different prices and yields, sensitivity analysis was carried out when lupin yield, lupin price and canola price was increased or decreased by 25% (Table 5). In these sensitivity analysis scenarios, each component was changed with the other prices and inputs at the baseline level. Sensitivity to management was also tested for stocking rate and supplementary feeding. The contribution of increasing stocking rate to the increase in profit from grazing standing lupin crops was tested by constraining the stocking rate to the level that was optimal when there was no standing crop. Additionally, the importance of changes in the level of supplementary feeding was tested, with supplement fed per DSE constrained to levels between 36 and 42 kg/DSE for both the base farm and the farm with the optimum area of standing lupin crop. These constraints approximated total supplementary feeding of between 628 and 728 tonnes per farm.
| Variables | High (+25%) | Baseline | Low (−25%) | |
|---|---|---|---|---|
| Lupin (t/ha) | 2.25 | 1.80 | 1.35 | |
| Lupin (A$/t) | 412 | 330 | 247 | |
| Canola (A$/t) | 707 | 566 | 424 |
Baseline prices were determined using the 50th percentile prices for grain over the period 2004–2020 (Mecardo 2023).
Results
Impact of grazing standing lupin crops on whole-farm profitability
Incorporating lupin grazing into the farm system increased whole-farm profit by nearly A$30,000, or A$200/ha of lupins, compared to the base farm where all crops were harvested and the stubble grazed (Table 6). Grazing standing lupins was more profitable than harvesting. Whole-farm profit decreased by an average of A$2000, or A$20/ha over a range of 50–150 ha of lupins when harvested. The optimum area of lupin crop to grow and graze was 7% (150 ha) of total farm area (Fig. 1). The benefit from incorporating grazing of standing lupin crops was associated with an increase in stocking rate of 1.2 DSE/ha, an increase in total supplementary feeding of 70 tonnes, and an increase in revenue from sheep sales of A$105,200 (Table 6). The increase in revenue from sheep sales includes an extra 260 lambs produced and an increase in average sale price of A$7 per lamb compared to the base farm when no standing crop was grazed.
| Farm parameter | Base farm | Standing lupin crop | |
|---|---|---|---|
| Area of lupins (ha) | 0 | 150 A | |
| Area of canola (ha) | 350 | 220 | |
| Area of barley (ha) | 390 | 370 | |
| Area of pasture (ha) | 1270 | 1270 | |
| Whole-farm profit (A$) | 250,300 | 279,700 | |
| Grain revenue (A$) | 478,000 | 374,000 | |
| Wool revenue (A$) | 547,500 | 606,000 | |
| Sheep sales (A$) | 665,500 | 770,700 | |
| Labour expense (A$) | 232,500 | 235,500 | |
| Stocking rate (DSE/ha) | 13.6 | 14.8 | |
| Ewes mated | 7410 | 8160 | |
| Total supplement (t) | 630 | 700 | |
| Supplement fed (kg/DSE) | 36.3 | 37.2 |
Optimum weaner liveweight and time of turn off when grazing standing lupin crops
For the optimal scenario when weaned lambs graze 150 ha of standing lupin crop, Merino wether and mixed sex crossbred lambs graze the high-quality stubble components and standing crop at a stocking rate of approximately 30 weaners/ha from November until they are sold in late January/early February. The remaining lower quality standing crop components were then grazed by adult ewes until March. Merino ewe lambs did not graze the high-quality standing crop available, which resulted in an average maximum liveweight of only 30 kg (Fig. 2).
Optimum liveweight profiles (kg) of crossbred wether lambs for a mixed farm in south-west Western Australia when able to graze the standing lupin crop (black, solid line) and on the base farm with no lupins (black, dotted line). The liveweight profiles of Merino ewe lambs with the standing lupin crop (grey, solid line) and on the base farm with no lupins (grey, dotted line) are also shown. Note: Merino wether lambs and crossbred ewe lambs not shown to improve clarity.
Impact of nitrogen fixation on whole-farm profitability
The profitability of incorporating lupins into the farm system was influenced by the assumed level of N fixation of the lupin crop. If N fixation was 50 kg N/ha, whole-farm profit increased by A$3000 in all scenarios. If N fixation was 0 kg N/ha, whole-farm profit decreased by A$7500 in all scenarios. The trade-off between grazing and harvesting the lupin crop did not change at different levels of assumed N fixation, with grazing always being A$30,000 more profitable than harvesting.
Sensitivity analysis for canola and lupin price and lupin yield on whole-farm profitability
The profitability of grazing standing lupin crops was sensitive to canola price, with a 25% increase in canola price reducing the margin between no lupins and when 150 ha of lupins was grazed by A$13/ha (Fig. 3). This was due to lupin and canola both occupying the same break crop position in the rotation, with changes in the underlying profitability of each crop impacting the opportunity cost of growing one versus the other. However, at all price points, it was always more profitable to graze rather than harvest the lupin crop.
Whole-farm profit (A$/ha) when canola price (A$/t) was decreased by 25% below or increased by 25% above the baseline (Std) canola price of A$566/t for the base farm with no lupins (▲) and when 150 ha of lupins was grazed (○) or harvested (■) for a mixed farm in south-west Western Australia.
In comparison, the profitability of grazing lupin crops versus harvesting was only slightly influenced by lupin price, with a 25% increase in lupin price decreasing the margin between grazing and harvesting by only A$5/ha (Fig. 4). The margin between grazing standing lupin crops and harvesting the lupins increased when lupin price reduced, because more supplementary lupins were fed when the crop is grazed. At 25% lower lupin prices, whole-farm profit was higher because lupins are the main supplement purchased and used on farm, thereby reducing cost and increasing profit. The reduction in profitability plateaued when lupin price increased by 25%, because at this point it was more profitable to substitute alternative supplements to meet the energy requirements of the stock, so further increases in lupin price did not reduce profit.
Whole-farm profit (A$/ha) when lupin price (A$/t) was decreased by 25% below or increased by 25% above the baseline (Std) lupin price of A$330/t for the base farm with no lupins (▲) and when 150 ha of lupins was grazed (○) or harvested (■) for a mixed farm in south-west Western Australia.
The value of grazing vs harvesting the 150 ha lupin crop was also only slightly influenced by lupin yield, with the trade-off remaining very similar (Fig. 5). However, whole-farm profit increased as yield increased (Fig. 5). This small effect was due to the relatively small optimum area of lupin crop sown, which was only 7% of total farm area.
Impact of grazing standing lupin crops on weaner survival and whole-farm profitability
Weaner survival did not change with the incorporation of standing lupin crops into the farm system. In the base scenario, as well as when grazing the standing lupin crops, weaner mortality was only 1%. In both scenarios, the average liveweight at weaning was greater than 25 kg for all classes of weaners and they maintained weight until 5 months post-weaning. This was achieved in the base farm by the lambs grazing high-quality stubble and receiving additional supplement if required to meet their energy requirements from November to early March.
Impact of grazing standing lupin crops on mating ewe lambs and whole-farm profitability
The optimum farm scenarios for both the base farm scenario, and when standing lupin crops were incorporated, did not include mating ewe lambs at 7–9 months of age. When the model was constrained to mate 50% of the Merino ewe lambs, profit reduced by approximately A$2000 in both scenarios. Merino ewe lambs did not graze the lupins, and hence had a very similar liveweight pattern in both the base scenario and when grazing standing lupins (Fig. 2).
Impact on profitability when lambs are sold later when grazing standing lupin crops
When stocking rate was constrained at 13.6 DSE/ha, grazing standing lupin crops increased whole-farm profit by approximately A$12,500, or A$83/ha (Table 7). The increase was largely due to higher revenue from lamb sales, as lambs were sold, on average, 39 days later, were 2.9 kg heavier and received an extra A$13 per lamb due to timing of sale (Table 8). An increase in wool revenue also contributed to the increase in farm profit, derived from the later sale date and hence greater wool production when the lambs are shorn before being sold. In this scenario, supplementary feed increased by 40 tonnes; however, whole-farm profit increased by less than A$1000 when tested over a range of 100 tonnes of supplement fed. This indicated that the increase in supplement was not a profit driver.
| Parameters | Change | |
|---|---|---|
| Whole-farm profit (A$) | +12,500 | |
| Grain income (A$) A | −42,800 | |
| Wool revenue (A$) | +9500 | |
| Merino wether and crossbred lamb sales (A$) | +59,500 | |
| Sale time (days) | +39 | |
| Supplementary feed (t) | +13,200 | |
| Labour expense (A$) | −2000 |
| Sale parameter | Base farm | Standing lupin crop | |
|---|---|---|---|
| Sale price | |||
| Merino wether lamb (A$/hd) | 119 | 135 | |
| Crossbred ewe lamb (A$/hd) | 125 | 130 | |
| Crossbred wether lamb (A$/hd) | 121 | 141 | |
| Sale month | |||
| Merino wether lamb | Jan | Feb | |
| Crossbred ewe lamb | Feb | Mar | |
| Crossbred wether lamb | Dec | Feb | |
Discussion
Incorporating standing lupin crops for grazing into a mixed farming system in south-west Western Australia increased profitability by almost A$200/ha of standing crop, supporting our hypothesis. The optimum area of lupins sown on the farm, modelled by the AFO, was 150 ha, or 7% of total farm area. By contrast, profit decreased by A$26/ha of lupins when the same area of lupins were grown and harvested. The benefits of grazing compared to harvesting still applied when lupin yields or lupin prices were increased or decreased by 25%, or when N fixation was increased or decreased. The profitability of incorporating lupins into the farm system was sensitive to canola price, with a 25% increase in canola price leading it to be just as profitable to graze standing lupins as to grow canola. However, this was with all other variables that influence profit staying constant, including N fixation assumptions, lupin price, and sheep prices. Whole-farm economic modelling indicated that in the south-west of Western Australia, it was always more profitable to graze standing lupins rather than harvest the lupins.
The increase in profitability due to grazing standing lupins was primarily due to a 1.2 DSE/ha increase in whole-farm stocking rate. Stocking rate is a key driver of sheep enterprise profitability and of greater importance than production per head (Young et al. 2011). The standing lupin crops improved the supply and quality of the paddock feed during late spring and summer, and by decreasing the cost of feed during this period, it becomes more profitable to support higher animal numbers through other periods of feed shortage. This result aligns with other modelling studies based in the lower rainfall region of Western Australia, which found that the introduction of an improved feed source increased whole-farm profit and stocking rate (Bathgate et al. 2009; Moore 2009). Moore (2009) found that the optimum stocking rate increased by 1 ewe/ha when able to graze spring and dual-purpose wheat in winter, while Bathgate et al. (2009) reported an increase in optimum stocking rate of 0.5 DSE/ha with the inclusion of biserrula and serradella in late spring. It is clear that stocking rate must be increased to fully capitalise on potential gains in farm profit due to the improved feed source provided by the standing lupin crops.
When stocking rate was constrained to the optimum predicted by AFO for the base farm where lupins were not sown, which was 13.6 DSE/ha, the increase in profit was reduced by A$110/ha of standing crop. This smaller gain in profit was primarily due to an increase in revenue from sheep sales and wool and a change in selling strategy. The Merino wether and mixed sex crossbred lambs were kept on average for 1 month longer and sold for A$13 more per lamb. Supplementary feeding per DSE was increased due to keeping the lambs for longer; however, the sensitivity analysis on the level of grain supplement fed showed it was not a significant contributor to profit. This result aligns with the grazing simulation study conducted by Robertson et al. (2014), with similar rainfall in south-east Australia, which found that at the optimum stocking rate, there was no significant difference in profit when the sale weight of the lambs varied by up to 17 kg when grain was the main feed source. The A$12,500 increase in farm profit from grazing standing lupin crops highlights that the standing lupin crops provide a more cost-effective feed source than supplementary feeding with grain.
Weaner survival over summer and autumn was not influenced by the incorporation of grazing standing lupins and, hence, changes in weaner survival did not contribute to a difference in profit. This highlights the importance of optimising weaner survival to farm profitability, irrespective of the introduction of an improved feed source. Additionally, mating ewe lambs at 7–8 months of age rather than at hogget age was not profitable either in the base farm or when grazing standing lupin crops was incorporated into the farm system. Unlike the Merino wether and mixed sex crossbred lambs, Merino ewe lambs did not utilise the higher quality standing lupin crops and instead were managed to achieve the minimum growth rates required to optimise their survival. They reached a peak weight of 30 kg at 5 months of age, which they maintained over summer, whereas previous work by Young and Thompson (2021) suggested that the optimum liveweight to mate ewe lambs at 7–9 months of age across a range of environments was between 70% and 75% of mature weight. Not prioritising the standing lupin crops to feed ewe lambs to achieve these target liveweights for mating is also consistent with the current analysis which did not allocate these crops to mature ewes to gain weight prior to mating. It is clear that utilising the improved feed source provided by standing lupins for liveweight gain and increasing the sale value of slaughter lambs was more profitable than using this feed to improve conception rates for adult ewes or mate ewe lambs. This might be impacted by the modelled farm having survival rates of only 81% for single-born lambs and 67% for twin-born lambs. These survival rates are about 10% lower than the survival rates on commercial farms reported by Thompson et al. (2023), and it is known that lower survival rates reduce the potential economic gains from increasing conception rates (Young et al. 2014). It is therefore possible that for different production systems, it may be more profitable to graze standing lupin crops with ewes to increase conception and weaning rates.
The static equilibrium mode of the AFO model did not account for the degree of management complexity, seasonal variation and the risk aversion of farmers, and as such, outputs such as optimum stocking rate are sometimes critiqued as unrealistic. However, utilising the carrying capacity equation reported by Saul and Kearney (2002), a farm with a 6-month growing season and paddocks greater than 20 ha is predicted to run 11–13 DSE/ha, depending on the phosphorous levels of the soil. While this stocking rate is lower than the 13.6 DSE/ha stocking rate proposed in the optimum scenario when standing lupin crops are incorporated into the system, in practice, the AFO model operates under the assumption of perfect knowledge and profit-maximising behaviour, leading to more efficient resource allocation and higher optimum stocking rates. The proximity of the optimum stocking rate to other predictions leads to confidence in the validity of the results.
Further data collection of liveweights whilst grazing stubbles would improve the accuracy of this analysis, as the calibration of these feed sources in the AFO impacts the marginal profitability of grazing the standing lupin crops. In addition, further research on the impact of increased ground cover loss on grazing standing lupin crops is also needed to understand the impacts and any management changes required. Any management changes to reduce risk of lupinosis, such as stopping grazing of lupins in February or after severe rainfall events was also not specifically represented in this analysis. Despite some limitations, this analysis expands upon prior gross margin analyses conducted by Warner et al. (1998), representing a significant step forward in understanding the profitability of grazing standing lupin crops.
Data availability
The data that support this study will be shared upon reasonable request to the corresponding author.
Declaration of funding
Amelia Gooding was the recipient of a Murdoch University Agribusiness Connect Scholarship, Australian Wool Education Trust Scholarship and the West Australian Livestock Research Council Scholarship.
Acknowledgements
In addition to the funders of the above scholarships, the participating sheep producers are thanked for their contribution to this work.
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