The Department of Primary Industries and Regional Development … · 2020. 9. 25. · FOREWORD . The publication of this booklet, as a key deliverable for the KPCA Irrigated Fodder

The Department of Primary Industries and Regional Development is working in partnership with KPCA to deliver this program

The State Government is facili tating growth and development in the WA agrifood sector through the Agribusiness Innovation Fund’s Grower Group Grants Program

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FOREWORD

The publication of this booklet, as a key deliverable for the KPCA Irrigated Fodder and Grazing Animals Production Systems Analysis for the Northern Beef Industry Project ( ‘ Irr igated Fodder Production Project’) , has been made possible through the Department of Primary Industries and Regional Development’s (DPIRD’s) Agribusiness Innovation Fund.

The overarching purpose of this Irr igated Fodder Production Project has been to conduct a review, focused analysis and develop information products to support pastoralists/enti ties considering irrigated fodder developments in addition to those already managing irrigated fodder and grazing animal production systems in Northern WA. The Irr igated Fodder Production Project has been conducted in two stages with the init ial stage consist ing of a l iterature review and gap analysis and the second stage result ing in the publication of this booklet.

Irr igated fodder production on pastoral leases in Northern WA is sti l l an emerging area with signif icant potential to increase productivity and profitabi li ty in the catt le industry in a manner that is fundamental ly consistent with ecologically sustainable rangelands management requirements/objectives as well as sustainable use of ground and surface water resources. Furthermore, irrigated fodder developments on the Northern WA pastoral estate help ensure strategic advantage and resil ience in relat ion to variable average rainfall and temperatures which ult imately ensures enhanced and proactive animal welfare outcomes. It also provides exciting opportunit ies to further realise the potential of Aboriginal held/managed pastoral leases.

In order to better understand the potential for irr igated fodder production, i t is important to put the land use footprint of exist ing and proposed irr igated agriculture into context, including key development considerations which are set out below:

• The entire pastoral estate in the Kimberley and Pilbara regions cover 34.2 mil l ion hectares of land (21.2 mil lion hectares in the Kimberley and 13 mill ion hectares in the Pilbara). → The average size of the 92 pastoral leases in the Kimberley is just over 230000 hectares and

228000 hectares for the 57 pastoral leases in the Pilbara. → Approximately 30% of the pastoral leases in the Kimberley are Aboriginal held/owned and around

10% in the Pilbara. • The total amount of land currently under irr igation in Northern WA (Kimberley, Pilbara and Gascoyne)

regions is approximately 30,800 hectares. → The vast majority of this area is for hort icultural, agricultural or silvicultural production systems,

located on freehold or agricultural lease land. → Of this total only 4041 hectares is located on pastoral leases and on mining leases. → In the Kimberley region there is a total of just over 25400 hectares of irr igated land, of this,

around 600 hectares is subject to diversification permits on pastoral leases for irrigated fodder production.

• Government led developments such as the Ord River Irr igation Scheme have tradit ionally provided the base funds and impetus for development.

• Proponent led developments are privately funded and have managed to succeed despite a high level of risk and uncertainty, which is an outstanding achievement by these pastoral ists. The future prospects are indicating that this trend will continue in a steady considered staged manner.

• Based on current knowledge and substantiated proposals and plans the next phase of future expansion of irr igation on the pastoral estate is likely to be around 6000 to 7800 hectares across mult iple sites.

• New developments are subject to a high level of r igor, scrutiny and monitoring, providing confidence that the development and any resources and landscape impact can be sustainably managed over t ime.

• Earning the trust and confidence of the communities and peoples of the Kimberley and Pilbara is essential to being able to successfully progress irr igated fodder developments.

The content of this booklet/outputs from the Irr igated Fodder Production Project wil l also compliment and be incorporated into an upcoming DPIRD Technical Bulletin - “Mosaic agriculture – A guide to irr igated crop

KPCA Irrigated Fodder Project Workshop in Broome on 28 Feb 2020: L-R - Andrew Millar (Argyle Cattle Co), Lux Lethbridge (Warrawagine Catt le Co), Trevor Price (DPIRD), Trudi

Oxley (KPCA Consultant), Bel inda Lethbridge (Warrawagine Catt le Co), Jake O’Dell (Hancock Agriculture), Dennis Poppi (KPCA Consultant), Ian St irl ing (Pardoo Beef Corporation), Sam Crouch (DPIRD), Chris Schelfhoult (DPIRD), Nei l MacDonald (KPCA Consultant), Cl inton Revell (DPIRD), Chris Ham (DPIRD), Emma White (KPCA

CEO), David Stoate (KPCA Chair and Owner/Manager Anna Plains Stat ion) and Geoff Moore (DPIRD).

and forage production in northern WA”, part icularly sections 1, 3 and 4 of this booklet. The upcoming DPIRD Technical Bullet in will be a very comprehensive publication on the signif icant body relating to irrigated fodder production of work being undertaken by DPIRD, with Meat and Livestock Austral ia support in certain instances, in Northern WA. This builds on previous work through the Northern Beef Futures, now Northern Beef Development Program and Transforming Agriculture in the Pilbara Projects within DPIRD, and the earl ier Water for Food Project.

The delivery of the Irr igated Fodder Production Project would not have been possible without the significant input, both from a technical and project governance perspective, from Chris Ham at DPIRD, Professor Kevin Bell from Pardoo Beef Corporation, Dr Andrew Ash from CSIRO (to September 2019) and KPCA Chair David Stoate, owner/manager of Anna Plains Station.

We would also l ike to thank Lux and Belinda Lethbridge from Warrawagine Catt le Co, Ian Stir ling from Pardoo Beef Corporation, Sim Mathwin from Rio Tinto, Angus Galwey from Shamrock Gardens, Jake O’Dell from Hancock Agriculture, Andrew Millar from Argyle Catt le Company, Haydn and Jane Sale from Argyle Catt le Company/Mandora Station and Phil Hams from GoGo Station for their signif icant contr ibutions to the Irr igated Fodder Production Project.

Thanks also go to other key DPIRD staff – Rob Cossart (to February 2020), Renee Zuks, Sam Crouch, Geoff Moore, Clinton Revell, Chris Schelfhout, Trevor Price, Mark Holland, Ralph de Luca and Anita Wyntje.

We would also l ike to acknowledge Dr Chris Chilcott and the teams from CSIRO as this Project has strong synergies with the Northern Australian Water Resource Assessment for the Fitzroy Catchment, published in August 2018 and the CSIRO led ( in partnership with KPCA, NT Catt lemen’s Association and AgForce Qld) Northern Beef Situational Analysis for the Cooperative Research Centre for Northern Austral ia which will be published imminently.

Lastly – we are very grateful to our Stage 2 Project Consultants for playing a pivotal role in developing this booklet – Neil MacDonald, Emeritus Professor Dennis Poppi, Dr Andrew Ash, Trudi Oxley and Cameron McDonald. Thanks also go to our Stage 1 Literature Review and Gap Analysis consultants – Giovi Rural Services (Tim Macnamara and Dan Hester). Big thanks also go to Jo Shearn for her graphic design ski lls.

TABLE OF CONTENTS

1. MAKING THE DECISION WHETHER TO INVEST IN IRRIGATION – SOME ASPECTS TO CONSIDER .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

1.1. WHY PRODUCTION OF IRRIGATED FODDER IS AN ATTRACTIVE OPTION ............... 1 1.2. IS IRRIGATED FODDER PRODUCTION RIGHT FOR MY BUSINESS? ......................... 3 1.3. CONCEPT DECISIONS TO BE TAKEN ...................................................................... 3 1.4. GOVERNMENT APPROVALS/PERMITS .................................................................... 3 1.5. SOME PRACTICAL OBSTACLES REPORTED BY PRODUCERS ................................. 6 1.6. PROBLEMS WITH BUDGET PROJECTIONS .............................................................. 6 1.7. BIOSECURITY ....................................................................................................... 7 1.8. FUTURE POSSIBILITIES ......................................................................................... 8 2. PRINCIPLES OF STAND AND GRAZE, AND CUT AND CARRY .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 2.1. SUMMARY .............................................................................................................. 9 2.2. STAND AND GRAZE ................................................................................................ 9 2.3. CUT AND CARRY .................................................................................................. 10 2.4. HAY AND SILAGE ................................................................................................. 11 3. A QUICK GUIDE TO ANIMAL NUTRITION .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 3.1. THE KEY POINTS ................................................................................................. 12 3.2. SPECIFIC POINTS FOR IRRIGATED TROPICAL PASTURES .................................... 14 3.3. CROPPING SYSTEMS AND FEEDLOT OR YARD FEEDING...................................... 15 3.4. USEFUL TABLES AND DATA: ................................................................................ 16 3.5. REFERENCES ...................................................................................................... 17 4. WHAT LIVE WEIGHT GAIN CAN I EXPECT? .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 4.1. STAND AND GRAZE .............................................................................................. 18 4.2. CUT AND CARRY .................................................................................................. 20 4.3. IF THE LWG OF YOUR CATTLE IS LOWER THAN YOU ARE EXPECTING ................. 22 4.4. EFFECT OF SUPPLEMENTATION ON INTAKE OF PASTURE ................................... 23 4.5. FEEDLOT RATION FOR CUT AND CARRY SYSTEMS .............................................. 24 5. USING IRRIGATED FORAGES TO FEED HEIFERS .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 5.1. INCREASING LIVEWEIGHT OF HEIFERS ............................................................... 26 5.2. YEARLING MATING .............................................................................................. 29 5.3. SPIKE FEEDING ................................................................................................... 29 5.4. RADICAL EARLY WEANING ................................................................................... 30

6. YOU CAN’T MANAGE WHAT YOU DON’T KNOW .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 6.1. DM PRODUCTION ................................................................................................. 31 6.2. LIVE WEIGHT GAIN (LWG) .................................................................................... 34 7. INTEGRATING IRRIGATED PASTURES INTO BEEF OPERATIONS IN THE KIMBERLEY

AND PILBARA REGIONS .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 7.1. BACKGROUND ..................................................................................................... 36 7.2. WHAT ARE THE IRRIGATED FORAGE OPTIONS TO ADD VALUE TO A BREEDING

ENTERPRISE? ...................................................................................................... 37 7.3. DOES IT PAY? ...................................................................................................... 38 8. INDICATORS TO ASSESS THE PROFITABILITY OF IRRIGATED FORAGE... . . . . . . . . . . . . . . . . 41 8.1. INTRODUCTION ................................................................................................... 41 8.2. INDICATORS TO COMPARE THE RELATIVE BENEFITS OF DIFFERENT BEEF HERD

MANAGEMENT OPTIONS ...................................................................................... 42 8.3. PRACTICAL IMPLICATIONS FOR GROSS MARGIN BUDGETING AND ANALYSIS ..... 42 8.4. USING INVESTMENT ANALYSIS TO COMPARE OPTIONS ....................................... 43 8.5. PRACTICAL IMPLICATIONS AND PRODUCER EXPERIENCE .................................. 46 8.6. INDICATORS TO COMPARE THE RELATIVE PRODUCTION COST OF A UNIT OF BEEF

OR HAY ................................................................................................................ 46 8.7. PRACTICAL IMPLICATIONS OF USING COP ANALYSIS .......................................... 47 9. MARKET OUTLOOK FOR CATTLE OFF IRRIGATION IN THE NORTH OF WA .. . . . . . . . . . . . . . 49 9.1. SUMMARY ............................................................................................................ 49 9.2. DEMAND FOR BEEF ............................................................................................. 49 9.3. LIVE EXPORT ...................................................................................................... 50 9.4. INDONESIA .......................................................................................................... 50 9.5. VIETNAM .............................................................................................................. 50 9.6. ALTERNATIVE MARKETS FEEDING THROUGH TO CHINA ...................................... 51 9.7. USE OF IRRIGATION TO TARGET HIGHER PRICES ............................................... 51 9.8. DOMESTIC MARKETS ........................................................................................... 52 9.9. WELFARE............................................................................................................. 52 10. LIST OF ELECTRONIC TECHNICAL SUPPLEMENTS .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53

TABLE OF F IGURES Figure 1: Basic outline of digestive tract of a cow ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Figure 2: Predicted dry matter intakes of forage by 200, 400 and 600 kg steers across a range of pasture digestibil ity (Adapted from Minson and McDonald (1987) by McLennan (2015)) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Figure 3: Weight change of Brahman-cross steers grown on a high quality feedlot pellet diet at the University of Qld (Antari 2018). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Figure 4: Intake response to a supplement (McLennan) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Figure 5: Maiden Heifers, and Figure 6: First Lactation Heifers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 Figure 7: Pregnancy Rates in Heifers of Different Weights – Actual vs Predicted .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 Figure 8: Comparative growth rates for Rhodes grass from various sites (data source WA DPIRD) . . . . . . . 31

TABLES Table 1: CP%, DM digestibil ity and ME content of Rhodes grass ( leaf only) in fresh pasture in the Kimberley Pilbara region at various herbage masses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Table 2: CP%, DM digestibil ity and ME content of Rhodes grass pasture (or hay or silage cuts) at various herbage masses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Table 3: Indicative cattle growth rates based on MLA feed intake, l iveweight and feed quality relationships and assuming minimum protein requirements are met and that the cattle are walking 2km per day* .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Table 4: Composition and costs of some common feeds with estimated transport cost from Perth to the Kimberley included, 2020 (source K.Bell, R.Sneath QDAF) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Table 5: Leaf:stem in growing Rhodes grass crops .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Table 6: Some values of LWG from Rhodes grass under pivots . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Table 7: Calculating a feed budget and stock numbers for a pivot (4 x 10 ha cells) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Table 8: Some examples of LWG from different qualities of hay .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Table 9: Live weight gain and hip height gain of Brahman-cross weaner (173 kg) steers during growth trials at Gatton, Queensland (Antari 2018)... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Table 10: Examples of LWG from other irr igated pasture systems and hay in northern Australia . . . . . . . . . . 21 Table 11: Some examples of responses to supplements with irr igated tropical pastures . . . . . . . . . . . . . . . . . . . . . . 22 Table 12: Pasture and supplement intake and extent of substitution for cattle grazing Rhodes grass . . . 24 Table 13: Some examples of cattle performance under feedlot diets in the Kimberley and NT .. . . . . . . . . . . . . 25 Table 14: Predicted pregnancy of maiden and first lactation heifers based on pre-mating weight . . . . . . . . 28 Table 15: Example of calculating financial return from feeding heifers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 Table 16: Predicted pregnancy based on pre-joining weight of yearlings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 Table 17: DM production of Rhodes grass measured at Pardoo in winter and summer (Kevin Bell) . . . . . . . 32 Table 18: Days required for regrowth to reach 3000 kg DM/ha before grazing again ( ie the rotation length) at Pardoo (Kevin Bell) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 Table 19: Simple feed budget to calculate number of cattle per pivot (4 x 10ha cells) . . . . . . . . . . . . . . . . . . . . . . . . . 35 Table 20: Costs of production ($/kg beef) for stand and graze irr igated forage for a range of average daily gains and annual pasture yields. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 Table 21: Return needed to achieve a break-even position for different levels of capital expenditure and different discount rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 Table 22: Assessment of some development options for North Australian cattle properties . . . . . . . . . . . . . . . . . 45 Table 23: Cost of Production (COP) l iveweight from rangeland beef businesses in the Kimberley and Pilbara .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47 Table 24: Pricing, Darwin Light Steers 2011 - 2019 .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51

KPCA Irrigated Fodder Production Project |

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1. MAKING THE DECISION WHETHER TO INVEST IN IRRIGATION – SOME ASPECTS TO CONSIDER

In many parts of the Kimberley and Pilbara, there are very few options for improving cattle production, especially the growing and fattening stages. These are remote areas with high transport costs, irregular rainfall, relative to, for example, the Top End of the Northern Territory, and soils that are mainly sandy with li ttle organic matter and water holding capacity. However, parts of the area have access to ground water and/or surface water, so many producers are considering improving their productive capacity by investing in irrigated fodder production.

1.1. WHY PRODUCTION OF IRRIGATED FODDER IS AN ATTRACTIVE OPTION

• It provides control over climate variabili ty and protection from drought to ensure animal welfare is well managed.

• It enables the producer to guarantee a reliable and predictable market supply, so a l ive export order can be fi lled at short notice when rangeland cattle are hard to source and prices are high outside the main muster season of April to September.

• It can provide access to a broader range of markets, particularly through being able to produce heavier cattle at a younger age. Producers may be able to access higher value markets, and their exposure to risk in the event of serious market disruption such as the closure of live export or the loss of a local abattoir may be reduced.

• The station may choose to produce alternative higher value breeds which need to be sustained with better nutrit ion.

• It provides an opportunity to strategically put weight on specific classes of cattle. In addition to adding growing steers and bulls, the fodder could be used for improved weaner management and provide an opportunity for early weaning which can have a substantial effect on the station’s breeder performance. It also provides opportunities to increase breeder productivity through increasing the pre-mating weight of maiden heifers, as well as spike feeding heifers in their last trimester of pregnancy, and enabling heifers to be mated a year early, as yearlings rather than two year old.

• It provides access to hay which the station would otherwise need to buy in, which may be more economical, offers security in years when hay is in short supply, and avoids introduction of weeds from purchased hay.

• Sales of surplus hay or si lage is a natural supplementary business.

Flowcart – Planning Agricultural Developments in Northern WA


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1.2. IS IRRIGATED FODDER PRODUCTION RIGHT FOR MY BUSINESS?

• Investing in irrigated fodder represents a radical change of direction for a cattle station. It is a complex and fast-moving system requiring discipline, precise timing and constant attention year-round. Maximising cattle performance and financial returns involves maintaining optimal feed quality and rigorous, consistent data capture and analysis. A delay of even one day can at times reduce feed quality below optimal levels.

• Efficient fodder production requires expertise in agronomy, irrigation management and mechanical farming operations. This is a different skill set from most Northern Australian pastoral operations and may be a steep learning curve for many station managers.

• As irrigation is a complex system, finding and maintaining staff with the requisite skills is even more difficult than usual, especially as many stations rely on backpackers who have l imited visa terms/can turnover relatively frequently.

• Compared to normal rangeland production, this is a novel enterprise for the Kimberley and Pilbara regions. Some experimentation will be required, and some mistakes (at times costly!) wil l be inevitable.

• Irrigation is a major investment and is sensitive to development costs and all the problems associated with complex operations in remote areas. It may take some years to become cost effective and in some circumstances may at best provide strategic advantage and not profit as such.

• Investment in irrigation can have significant li festyle implications. It becomes a 7 day a week year-round operation with no down time in the wet season, and with increased stress from the capital intensive investment and the need to find and manage skil led staff. Cyclone season can also be extra labour intensive, particularly with a significant number of pivots and the time it takes to tie these down and untie them.

1.3. CONCEPT DECISIONS TO BE TAKEN

• There are two different approaches to feeding the cattle - Stand and Graze and Cut and Carry. The advantages and disadvantages of each of these systems are covered more fully in a subsequent section – Principles of Stand and Graze and Cut and Carry.

• The main choices of irrigation systems are Centre Pivot or Subsurface Drip irrigation. Most stations have opted for pivots which are cheaper to set up and easier to maintain. Drip irrigation is more efficient in water use. Ferti liser use is also more efficient as there is less loss of Nitrogen (N) to volatil isation and the fertil iser is delivered directly to the root of the plant. It is also less vulnerable to cyclones.

• Scale needs to be considered. Although there are stations which have invested in multiple pivots, there is also a role for smaller schemes with just a few pivots. There is current investigation in the Pilbara of the use of small irrigation plots, from 10 hectares upwards, solely to supply stations with their annual hay requirement, though the investment in machinery is likely to be an impediment to viabil i ty of such concepts for many stations.

1.4. GOVERNMENT APPROVALS/PERMITS

• To grow fodder or a crop under irrigation on a Western Australian pastoral lease, several permits or licences are required, the main three being Diversification, Vegetation Clearing and a Water Licence. Each permit has its own requirements, and


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as each property’s proposal is unique the complexity of the approval process varies (refer to the flowchart at the end of this paper).

• Permit approvals wil l take time (8 months to 2 years, or possibly more) and incur significant costs ($200k to $1M) so it is strongly recommended that proponents conduct a thorough prefeasibil ity assessment first, including consultation with key Government agencies and regulators. Amending applications after submission is not easy. It creates confusion and substantially increases complexity, so planning is important.

• It is important to ensure that adequate consideration is given to design of the irrigation system design, including expansion requirements over time, geotechnical and soil conditions, the risk of flooding and infrastructure, including power, water and accommodation requirements.

Diversification

The first step is to apply to the Pastoral Lands Board (PLB) for a diversification permit either under section 119 or 120 of the Land Administration Act 1997 (WA - LAA). Section119 refers purely to pasture. Section 120 covers a broader range of crop, fodder or horticultural products but they sti ll must be related to the pastoral use of the land.

An important part of the PLB decision is the determination of which non-indigenous plants are approved for use on a pastoral permit. The PLB is not able to issue a general list of approved species because the LAA requires that the PLB approve permits on a case-by-case basis. Each application is referred to the Department of Primary Industry and Regional Development (DPIRD) to conduct a weed risk assessment. The assessments are provided at a regional level and therefore the weed risk may differ from region to region for the same species. The regional assessments of plant species are available online at https://www.agric.wa.gov.au/rangelands/environmental-weed-risk-assessments.

Once issued, diversification permits cannot be amended to include additional species not originally listed. Therefore, when applying for a diversification permit, the application should list all species of plant that may be considered in the future.

Water Licences and Vegetation Clearing Permits

The Department of Water, Environment and Regulation (DWER) has a ‘one stop shop’ which can advise on vegetation clearing and water l icencing requirements.

Water licences are often staged to allow the knowledge of the water resource to be developed. Licences require approval to dri ll , for hydrogeological modelling, pump testing and an operating strategy as well as annual monitoring. This will require the services of a qualified and experienced hydrogeologist. It is also important to ascertain whether there is a water allocation plan in place for the water resource (groundwater or surface) as this will also provide important guidance on the amount of water that may be available to apply for under a l icence, noting that WA has a ‘use-it-or-lose it’ approach to water licencing.

Vegetation Clearing permits can include a wider area, which will al low some flexibili ty when choosing the final site. The best way may therefore be to nominate an amount of clearing within a broader area of land.

It highly likely that a flora and fauna survey will be requested before a clearing permit is approved. This will require the services of a qualified and experienced environmental consultant. The survey


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will also be assessed by the Department of Biodiversity, Conservation and Attractions (DBCA) and carried out to their standards in addition to needing to meet DWER requirements.

Other Approvals

Local government development approvals wil l most likely be required so will also need to be understood and factored in.

Native Title Act and Aboriginal Heritage Act obligations may also need to be met, through both formal and informal processes. The PLB will refer the proposal to the relevant Native Title Group who wil l have an opportunity to comment on the proposal through a formal process. Outside of this, any consultation or negotiation with the Native Title Group is the responsibili ty of the proponent to initiate. It will be important to understand if there is already an registered Indigenous Land Use Agreement (ILUA) in place for the pastoral lease and what this allows for in relation to diversification and also Aboriginal Heritage provisions. If there is no Registered ILUA, then it may be necessary to negotiate one in addition to having a Heritage Protection Agreement in place for the conduct of Aboriginal Heritage surveys to underpin site feasibil i ty and development needs.

Diversification permits apply only to the pastoral lessee. They are not registerable or transferable to a third party which means they cannot be used to underwrite/secure finance for an irrigation development. Nor are they automatically transferred to the new lessee on sale of the property, although the PLB does have discretion to allow a streamlined process to transfer the permit on sale of the property, and thus allow the business to continue without disruption. This may change however if the WA Government progresses its Pastoral Lands Tenure Reform amendments.

This is only a simplified description of the approval process. The process will be described in more detail in DPIRD Bulletin No. 4915 Mosaic agriculture – A guide to irrigated crop and forage production in northern WA which is currently in preparation. Producers considering investing in irrigation should seek advice from DPIRD in the first instance www.waopenforbusiness.wa.gov.au/.

Advice from pastoralists who have gone through the permit process is that the length of time and expense involved should not be under-estimated. As there is li ttle consistency from one application to the next, an accurate estimation of the time and cost is often not possible.

http://www.waopenforbusiness.wa.gov.au/


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1.5. SOME PRACTICAL OBSTACLES REPORTED BY PRODUCERS

• The number of fodder species that have been tested and recommended, and which are permitted under West Australia’s non-indigenous plant policy, is limited. More may be available and recommended in the future, subject to a change in the policy and the way weed risks are assessed. In practice almost all producers currently rely on Rhodes grass, of which there are several varieties, as it has proved to be the most reliable and cost-effective available perennial grass. Cut and Carry systems have the additional options of preparing silage from annual crops, though the l imited range of fodder crops able to be grown may also constrain financial return in that system.

• The Kimberley and Pilbara are remote areas supplying only a few restricted markets. Few markets currently pay a premium for quality of cattle.

• The hay market is volatile and the local market can readily become saturated. Many hay buyers look for a cheap price rather than hay quality, so it is not always possible to achieve a return which reflects the high quality of hay produced under irrigation. Whether for sale or own use, storage of large qualities of hay in the open is problematic.

• Silage production is potentially a good alternative to hay but is hard to transport and sell.

• For some stations, staffing is the most difficult recurring problem. • With the low water holding capacity of sands, irrigation is required, even through the

wet season, and ferti liser is the main expense. Ferti liser costs are exceptionally high because of the remote location and the amounts required to achieve high yields of pasture and maintain optimum forage quality. The possibili ty of cheaper supply by ship is being investigated.

• In these remote areas, supporting services are difficult and expensive to access. This extends across the whole range of services from machinery repair to irrigation expertise.

• Good data collection and analysis is essential to maximise output from this precision system.

1.6. PROBLEMS WITH BUDGET PROJECTIONS

There are a number of reasons why it is difficult to draw up accurate generic models of returns from irrigated fodder, so budget projections need to be drawn up specifically for each site.

• Seasonal differences are important. Many projections describe average production over the year but the rate of grass growth in winter may be only a third of that of summer. This makes it hard to manage a stable herd, with insufficient feed in winter and problems in summer with grass becoming rapidly over-mature. Few Kimberley and Pilbara stations have options for varying herd numbers on the irrigation.

• Producer experience has shown that it is relatively easy to predict grass production under irrigation but relating that to animal performance is much more challenging. Maintaining optimum feed quality and projected uti lisation rates is difficult and can often be affected by factors out of the producer’s control. Trading factors may result in the station having too many or too few cattle on the irrigated pastures at any one time. Natural events such as cyclones can disrupt the station’s schedule, and trampling reduces the proportion of the pasture that is consumed by the animals.

• Budget projections should include depreciation of the infrastructure but many models do not. It is hard to generalise as there is considerable variation in the capital


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expenditure between stations. It is important to consider how repairs and maintenance increase through the li fe of a project as the infrastructure ages. Some models propose the use of second-hand equipment to make the capital investment more manageable, but if so the problems of reliabili ty and high costs of maintenance in remote areas need to be factored in as a trade off to more expensive new macinery costs.

• Budgets should also carry assumptions/provision for contingencies (i.e. cost savings or overruns) on capital/construction and operational costs respectively. As a rule of thumb, +/- 20% should be carried for capital/construction and +/- 10% for operational costs.

• The running cost of irrigation depends on how deep the water is pumped from, or indeed whether it is artesian and does not require pumping. Surface water wil l entail different considerations including the frequency of being able to pump which will be subject to water levels. This wil l also be an issue for groundwater if al location/permitting limits are reached for an aquifer/l icence.

• Depending on the reliabili ty of the allocation, there is a risk that water from the aquifer may not be available during extended dry periods. This risk may be higher if the irrigation is sourced from surface water.

• In cyclone-prone areas like the Kimberly and Pilbara coastal areas, insurance for the pivots is likely to be important but it can be expensive. Cyclones also interrupt the regular irrigation and harvesting schedules, and cause extra work tying down and untying the pivots.

1.7. BIOSECURITY

Biosecurity is a critical issue for all agricultural producers but is especially important for intensive high cost enterprises such as irrigated fodder. A clear demonstration of this is the rapid spread of the Fall Army Worm, a serious exotic pest of crops and pastures which was first reported in the Torres Strait in January 2020 and by March 2020 had spread through Queensland, the NT and into northern WA. Weed spread through contaminated seed, hay, vehicles and machinery is equally important, given the realtively minimal weed inundation in much of Western Australia’s rangelands. Local production of irrigated fodder is a way of reducing weed spread, but difficulties getting consistent supplies of clean viable seed have been reported. Each station should have a biosecurity plan, which identifies the highest risk pathways for pests, weeds and diseases to enter the property, and lays out the station’s commitment to mitigate those risks by conducting regular checks.The following links can be used to help to design a biosecurity plan: www.agric.wa.gov.au/small-landholders-western-australia/biosecurity-plans-small-landholders www.farmbiosecurity.com.au/toolkit/planner/ www.farmbiosecurity.com.au/toolkit/plans-manuals/ An emerging issue is the spread of cane toads towards the west Kimberley and Pilbara. Although cane toads do not have a direct effect on agricultural production, their spread is likely to attract considerable attention which may impact pastoral properties as they will be attracted to watering points/irrigation areas in addition to any natural water bodies.


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1.8. FUTURE POSSIBILITIES

• Australian cattle prices, including for live export, have generally been strong in recent years. Meat and Livestock Australia has forecasted that cattle supply wil l continue to tighten over the next two years, as by mid-2020 the size of the Australian herd wil l be at its lowest level since 1992. However COVID-19 has brought considerable uncertainty into all future market predictions, and as of May/June 2020 there have been pricing corrections in both Indonesia and Vietnam as key Northern Australian l ive export markets.

• In the longer term the export market for heavier cattle is expected to increase, mainly because of demand from China through its supply chain agreements with Laos and Myanmar.

• More market competition should eventually lead to payment of premiums for quality and reliabili ty.

• Feedback from agents and exporters indicate that the Kimberley and Pilbara industry will need to achieve a larger scale of output to attract significant interest. For example, the industry wil l need to be able to consistently fill export ships. Expansion of production under irrigation may be a way for the industry to achieve this scale and thus acquire more market power.

• There is probable future interest from external investors in the lease of pivots for cash crops. Although this may be disruptive to the station’s main cattle enterprise, it could provide alternative income as a safety net.

• Throughout Australia access to irrigation water is increasingly valued, so an investment in irrigation infrastructure will add significantly to the overall value of the station.

Information on the process for WA Government approvals was provided by Chris Ham, Senior Development Officer DPIRD Broome. This information will also be incorporated into the upcoming DPIRD Technical Bulletin - “Mosaic agriculture – A guide to irrigated crop and forage production in northern WA”.

Further Information


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2. PRINCIPLES OF STAND AND GRAZE, AND CUT AND CARRY

2.1. SUMMARY

Stand and Graze refers to animals grazing irrigated pastures, usually in a rotational system while Cut and Carry is the practice of growing and harvesting forage for later use as hay or silage. Stand and Graze requires less capital investment and labour requirements than Cut and Carry. However, Stand and Graze has major practical problems particularly the difficulty of having the right number of cattle to put on the paddock, more wastage from trampling, and fewer crop options.

Cut and Carry allows the producer more control. A higher percentage of the feed can be harvested, and surplus feed stored to cope with fluctuating stock numbers. However, there are higher machinery and infrastructure costs and more labour may be required. There are also potential difficulties with locations for feeding, whether in yards or paddocks, and potentially additional permits may be required to satisfy environmental legislation and tenure. Cut and Carry also provides the opportunity to produce annual crops, such as maize in the form of silage, which may be more cost-effective on a nutrit ional basis than perennial Rhodes grass, though that is stil l to be proven.

Both systems provide opportunities to target a wider range of markets with precision marketing and offer a degree of independence from seasonal variation. Both systems require precise management to achieve optimum feed quality and significant farming skil ls.

In practice, it is very difficult just to focus on one of the two options. Almost all producers use elements of each. Small scale Stand and Graze is very difficult to manage.

There are still significant issues within the northern irrigation systems that require a more comprehensive understanding and should be investigated with systems research methodology.

2.2. STAND AND GRAZE

Stand and Graze involves the animals grazing the irrigated pastures, usually in a rotational system. Intuitively, grazing is considered to be a cheaper and more efficient way of harvesting grass and this system has initial ly been adopted by some Kimberley and Pilbara irrigators. There are however a number of practical difficulties.

• Achieving optimal feed quality requires harvesting the right amount at precisely the right time. If the grass is over-mature before the start of grazing, digestibili ty and protein decline rapidly, reducing animal performance. For Rhodes grass, which is the main forage grown, the best advice is to graze at the 4 leaf stage, before the rapid growth of stem. This is normally between 3000-3500 kg dry matter per hectare.

• Achieving the balance between number of animals grazing and pasture growth is very difficult. Pasture growth rates vary considerably between summer and winter. Natural events such as cyclones are very disruptive, and purchases and sales of cattle are often controlled by market factors with li tt le reference to feed supply. Few stations have convenient alternative areas to hold surplus cattle when the feed under the pivot is reduced, and few are able to source extra numbers at short notice when feed is outstripping consumption.

• Producers therefore remove excess grass by making hay or by slashing and mulching. • In the Kimberley, in summer, a Rhodes grass pivot could be ready for grazing in 16-

22 days after the previous grazing and/or cut; in winter that could be up to 56 days.


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In areas such as inland Pilbara with low night time temperatures, there may be no growth of perennial tropical grass in the winter. For tropical legumes, day length is also a factor to be considered, so there are zones and times of the year where temperate species may be appropriate.

• 4-6 cell rotations are common. This can be achieved by either having a number of pivots together or by subdividing pivots into halves or quarters.

• Trampling appears to reduce the util isation rate (percentage of the feed actually consumed by the animals) to about 50% of the available forage. This is a lower uti lisation rate than some dairy farming systems, so the reasons for the low value and possible ways of improving it may be a suitable subject for future research.

• This system normally works on perennial grasses, of which the main species is Rhodes grass. There are several varieties. The viabili ty of other species is being studied which may lead to a wider choice in the future.

• Ferti liser is the highest cost input on WA coastal sands. The costs of pumping water vary greatly depending on the depth of the water.

• Urine and dung patches in the pivot are significant problems which need to be corrected by mowing.

• Costs associated with perimeter fencing and sub-dividing pivots should not be under-estimated. They may be about $100,000 per pivot.

2.3. CUT AND CARRY

Cut and Carry systems involve harvesting the crop and feeding animals off-site, either in yards or paddocks. This can be in the form of hay, haylage or si lage.

Advantages

• Feed efficiency is higher than stand-and-graze with util isation rates of 80% achievable.

• It is an easier system to control as the feed is stored and used as required, although the difficulty and cost of storing hay is a major problem.

• A broader range of crops is possible including annual crops. From the l imited data available it appears that maize silage may a cost effective alternative to perennial grass in many areas. DPIRD has an extensive and on-going program to investigate the productivity of crops and pasture species in the Kimberley and Pilbara. This includes tropical and temperate legumes, temperate crops and other forage species.

• This system would suit areas such as the inland Pilbara, with its colder winters, because different crops can be selected for summer and winter.

• It avoids the creation of urine and dung patches, and the need to fence pivots.


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Disadvantages

• Labour costs may be higher. There are different estimates of the increment. One estimate was that Cut and Carry would require a 15% increase in labour, while another was that the labour required for two systems would be very similar.

• A much greater investment in machinery is needed, coupled with additional farming skills required to manage it.

• Feeding could be either in yards or pens or in a series of small paddocks on the ground or using hayracks or troughs. Further regulatory approvals may be required especially if the infrastructure is classified as a feedlot. Degradation of the feeding areas from the high stock density there might cause further issues.

• Cattle growth rates tend to be less than Stand and Graze as the animals have no opportunity to select a more nutritious diet.

• Hay storage is a major problem. Hay stored in the open is subject to damage from rain, but the size of hay sheds required would be very expensive, and tarpaulins are time-consuming and not entirely satisfactory.

• Feeding in pens carries a higher risk of cattle not getting fed than would be the case if they were grazing. This could be caused by machinery breakdown, a staff problem or extreme weather.

2.4. HAY AND SILAGE

In practice most producers will do elements of both Stand and Graze and Cut and Carry systems as the Stand and Graze system requires excess grass to be removed to prevent it becoming over-mature. This is usually harvested in the form of hay, and producers therefore have hay for specific groups of their own animals and for sale.

In many years, hay is a valuable commodity. However it is difficult to store long term and the hay market is volatile. Hay produced from irrigation is often high in quality, but without a grading system in the hay market, hay buyers are often not prepared to pay the premium price that is required.

Silage is probably the obvious choice of product for a cut-and-carry system as it is excellent feed and stores well. It is not easy to transport so its use as a marketable product is limited. It is hard to make good silage from tropical grasses, so high energy crops such as maize and sorghum (forage and grain) are more likely substrates. The potential for use of other high energy crops such as cassava has not yet been fully investigated.

For those prepared to invest in the required infrastructure, pelleted feed is a potential high value product.


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3. A QUICK GUIDE TO ANIMAL NUTRITION The MLA book “Beef cattle nutrition-An introduction to the essentials” is the best local guide for Australian conditions. Copies can be obtained from MLA or downloaded from the internet. https://futurebeef.com.au/document-library/beef-cattle-production-introduction-essentials/

The basic anatomy of the digestive tract can be seen in the following i llustration. The rumen is by far the largest digestive organ. It is anaerobic (no oxygen) and houses bacteria and protozoa (microbes or “bugs”) which under the anaerobic conditions can digest fibre and other carbohydrates and protein. Simple stomached animals such as humans and poultry cannot digest fibre. Ruminants have a unique abili ty to uti lise the fibre in feed sources such as pasture and therefore do not compete with humans for food.

3.1. THE KEY POINTS

• Microbes in the rumen digest food to produce volatile fatty acids (acetic, propionic and butyric acid) which are absorbed across the rumen wall and provide energy to the animal.

• Animal production is directly related to the amount of energy (metabolisable energy (ME)) consumed. The units are megajoules metabolisable energy per kilogram dry matter (MJME/kgDM).

• Rumen microbes degrade plant (and other dietary) proteins to ammonia, from which the microbes then make their own microbial protein. The microbes can also make protein from Non-Protein Nitrogen (NPN) sources such as urea but there are l imits to the amount that can be used.

• The microbes are continually flushed from the rumen and are digested and absorbed in the small intestine providing most of the protein that the animal needs. Cattle over 250kg can get all the protein that they need from this microbial protein.

• Low crude protein (CP) dry season rangeland pastures (less than 7% CP) are deficient in Nitrogen (N) for the rumen microbes. A urea (NPN) supplement is beneficial but there is an upper l imit to the rate of microbial protein synthesis, so urea wil l only ever give a maximum increase in live weight gain (LWG) of about 0.3kg/d when animals are losing weight and can only maintain live weight.

• High CP (over 7%CP) rangeland pasture (wet season) has enough N for good rumen function. A urea supplement is of no benefit in that situation.

• The intake of metabolisable energy (MJME/kg DM) determines the growth rate of the animal. Dry matter should always be used in nutrit ional calculations. Most hay is about 90%DM or 10% water. Green grass under pivots is usually around 20% DM or 80% water from October-April and 25%DM (75%water) from May-September. ME content (MJME/kg DM) is obtained from lab analysis of feed but book values (average values derived from a lot of different samples) are commonly used.

Figure 1: Basic outline of digestive tract of a cow


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ME intake = DM intake *ME content.

• DM intake is directly related to DM digestibil i ty (see Figure 1). Digestibili ty is a measure of what disappears between what is consumed and what passes out in the faeces (not digested) and is expressed as a percentage. ME content is dependent on the digestibili ty value.

Figure 2:

Predicted dry matter intakes of forage by 200, 400 and 600 kg steers across a range of pasture digestibility (Adapted from Minson and McDonald (1987) by McLennan (2015))

• Crude Protein (CP) is the other major nutrient we assess for nutritional value.

→ N * 6.25 = CP This is a conversion factor to measure CP from N analysis. → Less than 7%CP: CP is deficient for the rumen microbes and the animals lose weight → 7%CP: This will meet the maintenance requirement of the animal and usually the N

requirements of microbes. → 10-12%CP. This will meet the requirements for growing older animals (greater than

250kg). → 10-15%CP. This will meet the requirements for very young animals 100-200kg in weight

and rapidly growing animals. The higher the target weight gain, the higher the %CP required.

→ The growth rate of older animals wil l depend on the ME intake.

• For growing animals, greater than 250kg, and dry and lactating beef cows the rumen microbes can provide all the protein needed by the animal. Feed the rumen microbes is the first good nutritional principle. The growth rate of these older animals wil l depend primarily on the ME intake.


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• To achieve high rates of weight gain in smaller animals (less than 250 kg), microbial protein alone may be insufficient, and a source of undegraded dietary protein, often called bypass protein, will be required. This protein passes through the rumen without being broken down and is absorbed in the small intestine which is a more efficient process than rumen digestion. Protein meal from oilseeds such as cottonseed meal, copra meal and canola meal contain a significant proportion of bypass protein. However, it should be stressed that bypass protein is unlikely to be required in the Kimberley and Pilbara irrigation production systems because of the weight of animals moving onto the pivots.

3.2. SPECIFIC POINTS FOR IRRIGATED TROPICAL PASTURES

• Irrigated, high Nitrogen ferti lised tropical grass pastures under a pivot have a high CP and DM digestibili ty (and ME content) when grazed up to a herbage mass of 3000 kg DM/ha. Crude protein levels drop when herbage mass exceeds 3000 kg DM/ha.

• CP and DM digestibil ity of the whole plant declines quickly as plants mature but the value for leaf stays much higher. It is important to measure chemical composition with the same lab as all labs use different methods which may bias results.

Table 1: CP%, DM digestibility and ME content of Rhodes grass ( leaf only) in fresh pasture in the Kimberley Pilbara region at various herbage masses

Herbage mass kgDM/ha 1500 3000 5000

CP% 20 20 14-18 DM digestibility % 60-65 60-65 60-65 Estimated ME content MJME/kgDM 8.6-9.5 8.6-9.5 8.6-9.5

By comparison, hay at 5 tonne DM/ha (5000 kg DM/ha) contained CP% 13%, DM digestibil i ty 57% and ME content 8.1MJME/kg DM (Table 2). This includes leaf, stem and some dead material.

Table 2: CP%, DM digestibility and ME content of Rhodes grass pasture (or hay or silage cuts) at various herbage masses

Herbage mass kg DM/ha 1500 3000 5000 7000

CP% 12-18% 12-16% 10-14% 7-10 DM digestibility % 65 60 55 45-50 Estimated ME content MJME/kg DM 9.5 9 8 6.5-7

• Digestibil i ty and ME content are determined by the maturity of the plant so grazing up

to the 4 leaf stage or 3000 kg DM/ha will maximise DM digestibil i ty and ME content. Plant density (seeding rate) affects the relationship between leaf number and herbage mass. It is better to manage by leaf number and keep stem length short.

• The high CP pastures (greater than 12%) provide an opportunity for a response to an energy source (eg high energy pellets, grain or molasses).

• These high CP pastures have enough N (from the CP degraded) for the microbes in the rumen. Urea wil l not increase LWG (in contrast to low CP dry season rangeland pasture) and is not needed here.

• Irrigation water from some bores in the Kimberley and Pilbara regions contain high levels of sulphur (S). This can induce a copper (Cu) deficiency if animals graze solely on this pasture for long periods. The composition of the bore water should be checked.

• Soils are usually low in trace minerals and phosphorus (P). • A recommended fertiliser program will raise P levels or use supplement blocks.


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• Supplement blocks should be located outside the pivot area. Trace elements should be added (at least Cu, Se, Co) either in the form of:

→ Ferti liser. → Supplement blocks or loose l ick. → Intra-ruminal devices. → Drinking water.

Details of amounts can be obtained from DPIRD.

The expected cattle growth can be estimated from the l iveweight and the feed quality of the pasture or fodder. For example, a 400kg steer grazing a Rhodes grass pasture of moderate feed quality (62% DMD, ME 9MJ ME) has an expected growth rate of 0.60kg per day (Table 2). The DM intake (kg/day) of a 600kg steer is effectively double (202-208%) that of a 200kg animal to achieve the same growth rate.

Table 3: Indicative cattle growth rates based on MLA feed intake, liveweight and feed quality re lationships and assuming minimum protein requirements are met and that the cattle are walking 2km per day*

Liveweight (kg)

Feed quality Animal intake Growth rate

(kg/day)

Metabolisable energy

(MJ/kg DM) DMD %

Dry matter intake

(kg/day)

Metabolisable energy

(MJ/day)

200 8 56 4.8 38.2 0.30

9 62 5.3 47.1 0.60

10 68 5.6 56.2 0.95

400 8 56 8.1 64.1 0.30

9 62 8.6 77.2 0.60

10 68 9.0 90.0 0.95

600 8 56 10.5 83.2 0.30

9 62 11.0 98.2 0.60

10 68 11.3 112.6 0.95 *Growth rates will be lower where rangeland cattle are walking long distances for water (e.g. 7km in total)

3.3. CROPPING SYSTEMS AND FEEDLOT OR YARD FEEDING

The cost of production from an irrigated pasture system can be high and pasture management difficult. Growing and harvesting a crop may be an alternative especially in areas where winter growth of pasture is low. This provides a greater degree of control and forward planning than a grazing system but it comes with higher costs.

Points to note: • The cost of production for an irrigated grass under pivots can be high especially when

establishment costs are included. A cropping system may provide other options. • Crops:

→ Forage grasses eg forage sorghum.


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→ Forage legumes eg lablab, cavalcade, desmanthus, butterfly pea, stylos, cowpea, burgundy bean, faba bean.

→ High energy crops eg maize silage, sorghum silage, grain sorghum harvested soft dough stage.

→ These provide DM yields and nutrit ive values which are quite high.

• They can be fed alone to give a LWG (values are not currently available) or combined into a ration with a defined ME and CP content.

• Ration formulation is best done by a consultant nutritionist who can use a least cost ration formulator (LCR). This calculates the lowest cost formulation to provide required ME and CP levels. Grain (eg wheat, barley, maize, sorghum), leguminous seeds or by-products (eg lupins, soybean meal, canola meal, whole cottonseed, cottonseed meal, copra meal) can also be costed. The best combination of external and locally grown feeds can be determined.

• Some examples are given below but these depend on the cost per tonne of the available ingredients and can change from year to year.

→ Example 1 mixture of maize silage, wheat grain and lupins. → Example 2 mixture of cavalcade hay, feed mil l concentrate, jarrah silage, lupins,

molasses and sorghum grain.

Table 4: Composition and costs of some common feeds with estimated transport cost from Perth to the Kimberley included, 2020 (source K.Bell, R.Sneath QDAF)

Feed source DM% $/tonne DM ME (MJME/kg DM)

CP% (of DM)

Cost cents/ MJME

Rhodes grass pasture* 20 360 8.6-9.5 15-20 4.0

Maize silage 32 250 10.0 7.5 2.5 Maize grain 90 490 13.0 10.0 3.8 Wheat grain 90 500 12.0 13.0 4.2 Lupins 90 522 12.0 26.0 4.4 Canola meal 89 710 10.0 36.0 7.1 Palm kernel expeller ( imported) 90 550 11.5 16.0 4.8

Soybean meal ( imported) 90 950 12.0 46.0 7.9

Molasses 75 600 10.5 0.5 5.7 High energy pellets (various) 90 680 12.0 15.0 5.7

Cassava pellets ( imported) 88 580 12.0 4.0 4.8

* Depends on grazing management

3.4. USEFUL TABLES AND DATA:

Minson, DJ and McDonald, CK (1987) Estimating forage intake from the growth of beef cattle. Tropical Grasslands 21, 116-122.

Beef cattle nutrition, an introduction to the essentials Meat and Livestock Australia 2011https://futurebeef.com.au/document-l ibrary/beef-cattle-production-introduction-essentials/

https://futurebeef.com.au/document-library/beef-cattle-production-introduction-essentials/


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3.5. REFERENCES

McLennan S (2015) Nutrient Requirement Tables for Nutrit ion EDGE Manual. Final report of project B.NBP_0799 Meat and Livestock Australia.

Values for chemical composition and management of irrigated pastures and hay from the Kimberley-Pilbara region are supplied courtesy of Kevin Bell and the DPIRD team.

Contribution of K. Bell, Pardoo Beef Corporation and DPIRD acknowledged.


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*Pasture more mature than usual

4. WHAT LIVE WEIGHT GAIN CAN I EXPECT?

4.1. STAND AND GRAZE

Live weight gain (LWG) in cattle depends on metabolisable energy (ME) intake, which is a function of the intake of dry matter (DM) and the digestibil i ty of the food. Under grazing, maximising intake is dependent on the animal grazing mainly easily accessible leaf.

Digestibil i ty and protein levels in a Rhodes grass crop are highest in the 2,3 and 4 leaf stages. After the plants have passed the 4 leaf stage, stem growth accelerates and digestibil i ty and protein levels rapidly diminish. Close observation is therefore needed to spot the optimum stage to commence grazing when the plants have up to 4 leaves and before rapid stem growth starts. The pasture yield at this stage would normally be 3000-3500 kg/ha (with some variation depending on plant population). For this exercise a figure of 3000 kg/ha is assumed.

Recent data from Kevin Bell (Pardoo Beef Corporation) clearly shows how the proportion of leaf compared to stem declines as the crop grows.

Table 5: Leaf:stem in growing Rhodes grass crops This table shows that in growing crops the earl ier the stage of growth, the higher the leaf:stem ratio. However in practice, leaving the animals to graze on the pasture below about 1500 kg DM/ha results in reduced intake and lower LWG, as they are forced to eat the portion of the plants (stem, old leaf) that they had not previously selected. They also have to contend with pasture that has been damaged by trampling.

Following the rule “Entry 3000 kg DM/ha and Exit 1500 kg DM/ha” will maximise intake of Rhodes grass and other intensively managed tropical grasses.

Table 6: Some values of LWG from Rhodes grass under pivots

There is no reason why summer and winter growth rates of cattle should vary if grazing is kept within the recommended Entry 3000kg DM/ha and Exit 1500kg DM/ha. Exceptions are very hot and

DM kg/ha Leaf % Stem %

1000 92 8 1500 81 19 2000 79 21 2500 68 32 3000 62 38 3500 57 43

Breed Timing Number of head

Number of days

LWG kg/head/day

Droughtmaster and Brahman X

September - April 249-402 28-68 0.61-0.88

Droughtmaster and Brahman X April-September 540 150 0.77

Wagyu Pure bred May-July 210 86 0.30*

Wagyu Xbred (<25% Bos indicus) December - February NA NA 0.6


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humid conditions (e.g. around cyclones and peak summer months) where intake may be limited by heat and so LWG will be lower. Pardoo Beef Corporation has developed a panting score to identify when heat load might be reducing intake and live weight gain.

Of course, grass growth in winter is much slower, at times only a third of the summer rate, so the number of animals that can be fed is l ikewise smaller. The winter decrease in pasture growth is most pronounced in the inland Pilbara and least in the Kimberley.

The process for estimated feed consumption, calculating stock numbers for the pivot and preparing a simple feed budget is:

• A good general figure for consumption of dry matter in well managed tropical Rhodes grass pivots is 2.4% of l iveweight per day (24g DM/kgW/d) which includes energy required to walk 2km/day. A LWG of 0.6-0.7 kg/day is expected from this pasture.

• In the following simple feed budget, a 40 hectare pivot has been divided into 4 cells and the number of cattle needed is adjusted to keep the animals in the cell for 5 days and hence 20 days for the whole rotation. Util isation of the feed is estimated to be 50%.

Table 7: Calculating a feed budget and stock numbers for a pivot (4 x 10 ha cells)

250 kg steers 350 kg steers

DM start of grazing kg/ha 3000 3000

DM end of grazing kg/ha 1500 1500

Utilisation proportion % 50% 50%

Harvestable DM kg/ha 750 750

Cell size hectares 10 10

Harvestable DM in cell (kg) 7500 (=750*10) 7500

Consumption kg DM per day @ 2.4% W/day (24g DM/kg W/d)

6.0 (=24*250)/1000) 8.4

Grazing days (=7500/DM intake/d) 1250 (=7500/6.0) 893

Days to graze cell 5 5

Head to graze cell 250 (= 1250/5) 178


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4.2. CUT AND CARRY

Higher uti lisation of pasture growth can occur if cut and carry is used (up to 80%) as opposed to a stand and graze system (about 50%). However, it can be more costly and you will need an area in which to feed the animals. There may be regulatory restrictions on how this is set up and WA DPIRD are available for advice.

There is limited data on LWG results from cut and carry. Mature hay will only result in maintenance. This might be acceptable for cows and for holding stock, but if you want higher LWG, then hay needs to be of high quality and therefore cut while immature. The LWG of this high quality hay is sti ll likely to be below the LWG from well managed stand and graze systems because cattle will not have the opportunity to select a higher quality diet.

As indicated from the leaf:stem data in Table 1, nutrient quality declines as the crop grows. The producer’s decision of when to cut for hay is therefore vital, weighing up the balance between quality, quantity and the costs of harvesting.

Table 8: Some examples of LWG from different qualities of hay

Hay quality Expected LWG

High crude protein hay (15-20%CP) immature and with high DM digestibil ity (DMD 60-65%) and ME content (approximately 8.6-9.5 MJME/kg DM) cut at herbage mass 4000-5000 kg DM/ha

Around 0.60 kg/d

Average CP hay (10-15%CP) more mature but leafy and with lower DM digestibil i ty (50-60%) and ME content (approximately 6.9-8.6 MJME/kgDM) cut at herbage mass 5000-6000 kg DM/ha

Around 0.30 kg/d

Mature Rhodes grass hay very mature with a lot of stem and seed heads (CP approximately 5-7%), DM digestibili ty (45-50%) and ME content (approximately 6.0-6.9 MJME/kg DM) cut at herbage mass >6000kg DM/ha

Maintenance or no LWG


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LWG also depends on entry weight of animals or weight at start of feeding. As cattle mature, LWG and skeletal growth slow down. Once the animal has reached approximately 400kg l ive weight, i ts LWG will only be about 65-85% of the LWG achieved by 200kg weaners. This is important to know if you are wanting to finish cattle on pastures.

This is related to the change in skeletal frame size of the animal measured as hip height which slows as the approaches mature size. Hip height is a measure of how the frame (skeletal) size of the animal changes as it grows to maturity.

Table 9: Live weight gain and hip height gain of Brahman-cross weaner (173 kg) steers during growth tria ls at Gatton, Queensland (Antari 2018)

Days of experiment 0-100 101-200 201-295 296-395 396-449

Weight at start of each period (kg) 173 295 403 479 546 LWG kg/day 1.22 1.08 0.80 0.67 0.36 Hip height gain (mm/100 days) 120 85 53 30 27

Table 10: Examples of LWG from other irrigated pasture systems and hay in northern Austra lia

Source Days on pasture Entry weight LWG kg/d

Pangola-Leucaena Ord wet and Dry season (Petty et al 1998, 2012) 70-90 231-252 kg

Brahman X 0.60-0.73

Pangola Ord (Blunt and Jones 1977) 224 130 kg

Shorthorns 0.46

Sorghum crops as forage, regrowth and green chop (Blunt and Fisher 1973) 182

156-165 kg Shorthorns and

Brahman X 0.35-0.48

Rhodes grass hay low CP (5.8-6.6%CP) (McLennan 1997) 63 160 kg

Brahman X 0.07-0.09

Figure 3: Weight change of Brahman-cross steers grown on a high quality feedlot pellet diet at the University of Qld (Antari 2018) .


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4.3. IF THE LWG OF YOUR CATTLE IS LOWER THAN YOU ARE EXPECTING

If the LWG that you are getting does not match the values described above, possible reasons to be considered are:

• Herbage mass is >3000 kg DM/ha on entry. Need to redo feed budget by increasing animals. Alternative, if extra animals are not available, is to skip a cell(s) to one that has optimum herbage mass and leaf number and cut the skipped cell(s) immediately for hay/silage.

• Herbage mass is <1500 kg DM/ha on entry. Need to redo feed budget and reduce animal numbers or consider an energy supplement to compensate for periods of low pasture growth.

• There are more than 4 leaves on most plants and the stem is very elongated. Graze l ightly, then mow and remove the cut pasture so that regrowth has a better structure (less stem and dead material) on regrowth.

• The cattle have a mineral deficiency. Make sure Phosphorus (P), Cobalt (Co), Selenium (Se) and Copper (Cu) are adequate and supplement if necessary via ferti liser, intra-ruminal devices or in water supply (depending on the mineral).

• The cattle have internal parasites. Before animals go on the pivots, a parasite control program should be used (targeted drenching). Can be checked by doing a faecal egg count.

• Dung and urine patches are appearing. The interstitial (between) section between the dung and urine patches are being over-grazed. Mow the pasture and remove the cut pasture.

One alternative solution to increase LWG is to add a supplement. Rhodes grass that is highly ferti lised with a N fertil iser has a high level of CP (15-18%CP) in comparison to its metabolisable energy (9.5MJME/kg DM or 65% DM digestibil i ty). Adding a high metabolisable energy supplement will help the rumen microbes capture the excess N in the rumen and supply more protein and energy to the animal. Adding a supplement of urea in this circumstance will get no response.

Table 11: Some examples of responses to supplements with irrigated tropical pastures

Days on pasture

Entry weight

LWG Pasture (kg/d)

Supplement LWG (kg/d)

with supplement

Rhodes grass Kimberley 86 195 kg

Wagyu 0.30 High energy

pellets 12.4 g pellets/kgW/d

0.67

Rhodes grass Kimberley 42-54 199 kg

Wagyu NA High energy pellets 8.8 g

pellets/kgW/d 0.96

Rhodes grass Kimberley 59 281 kg

WagyuX NA Molasses 2.5 g/kgW/d 0.89

Dry season irrigated Pangola-leucaena Ord (Petty et al 1998)

70 213 kg BrahmanX 0.73 Maize grain

7.0 g/kgW/d

1.10 (No response in wet season)

Dry-wet season Pangola-leucaena Ord (Petty et al 2012)

92 252 kg BrahmanX 0.71 Molasses

5.0-9.9 g/kgW/d 1.09-1.22


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4.4. EFFECT OF SUPPLEMENTATION ON INTAKE OF PASTURE

When a supplement is given to cattle grazing high CP irrigated tropical pastures, intake of the pasture is reduced in response to the supplement. This is called substitution. The overall intake (pasture plus supplement) would be higher and also LWG would be higher than pasture alone.

This is different to low CP% rangeland pasture where a supplement of urea or protein meal increases intake. They are very different situations.

Figure 2 shows the decline in intake of pasture in response to intake of supplement. As level of supplement increases then intake of the pasture will decrease but live weight gain increases in response to an increase in total intake.

Substitution can be an advantage or a disadvantage in managing animals and pasture.

Advantage: as each animal eats less pasture you can carry more animals/pivot or if feed is short then you can keep the same number of animals/pivot. Live weight gain is also increased.

Disadvantage: grass growth can exceed animal intake as animals eat less pasture. Herbage mass will increase and soon be >3000kg DM/ha. Patch grazing wil l start to appear. LWG will decline. The solution is to increase animal numbers or reduce area by shutting some up for hay or silage and mow the pasture if too many patches occur.

Figure 4: Intake response to a supplement (McLennan)


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It is possible to estimate the extent of substitution for cattle grazing irrigated Rhodes grass when fed different metabolisable energy content supplements. The following example of how this information is used is based on data from pivots in the Kimberley and Pilbara region.

Table 12: Pasture and supplement intake and extent of substitution for cattle grazing Rhodes grass

SUPPLEMENT TYPE

Grains (13MJME/ kgDM)

Molasses (9.6MJME/kgDM)

Live weight kg 225 225

LWG on pasture kg/d 0.3 0.3

Pasture intake no supplement kgDM/d 4.96 4.96

Supplement level g/kgW/d 10 10

Supplement Intake kgDM/d 2.25 2.25

Pasture intake with supplementation kgDM/d 3.22 3.67

Reduction in pasture intake % 35 26

4.5. FEEDLOT RATION FOR CUT AND CARRY SYSTEMS

Higher utilisation of pasture growth can occur if cut and carry is used as opposed to a stand and graze system, but it can be more costly and you wil l need an area in which to feed the animals. There may be regulatory restrictions on how this is set up and advice should be sought from DPIRD.

There is l imited data on LWG results from cut and carry (see earlier). Mature hay will only result in maintenance. This might be acceptable for cows and for holding stock. BUT, if you want higher LWG, then hay needs to be of high quality and immature (high CP hay (15-20%CP) immature and with high DM digestibili ty (DMD 60%) and ME content (approximately 9.0 MJME/kg DM) cut at herbage mass 4000-5000kg DM/ha). The LWG from this high quality hay is stil l likely to be below the LWG from well managed stand and graze systems.

Rhodes grass can be used in a feedlot but to get high LWG (more than 1kg/d) it wil l need to be mixed with other ingredients of higher ME content. These can be grown under the pivots with maize silage a good example.

If this is the objective, a well formulated ration of high ME content and minimum CP% for a feedlot ration will need to be designed. This is best carried out by a feedlot consultant who can use a least cost l inear program system to design rations. Some examples are given below. It is important to realise that these examples are based on a particular price of ingredients, while in a functioning feedlot the ration is regularly adjusted to reflect the costs of potential ingredients at that point in time.

A feedlot ration may require ingredients sourced from elsewhere but the aim wil l be to grow the bulk of feed locally. All feedlot rations include minerals and premixes as necessary (not listed here).


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Table 13: Some examples of cattle performance under feedlot diets in the Kimberley and NT

Breed Days on feedlot

Entry weight kg LWG kg/d Number of

head Purebred Wagyua 37-85 265-361 0.70-1.29 122-155

Wagyu X Bos indicusa 84 332 0.87 97

Senepol bullsb 86-94 289-317 1.18-1.31 39-47 a Pardoo feedlot rat ion of maize si lage, wheat grain and lupins. b NT rat ion of cavalcade hay, concentrate, Jarrah si lage, lupins, molasses, rol led sorghum grain.

(The contributions of the Warrawagine Pastoral Company, Pardoo Beef Corporation and WA DPIRD to data are acknowledged.)


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0%

20%

40%

60%

80%

100%

150 200 250 300 350 400 450 500 550 600 650Pre-Calf Weight (kg)

Preg

nanc

y R

ate

% preg.logis(P)binom(P)

5. USING IRRIGATED FORAGES TO FEED HEIFERS

There are four ways in which the availabili ty of extra nutrition could help a station’s heifer performance and thus enhance the whole breeding enterprise:

• Increasing pregnancy rates in maiden and first lactation heifers by increasing pre-mating liveweight

• Yearling mating • Spike feeding • Early weaning

5.1. INCREASING LIVEWEIGHT OF HEIFERS

Heifers in tropical Northern Australia normally conceive at 2 years of age and calve at 3 years. In a major study of 15 stations in the Northern Territory, it was found that on average 75% of maiden heifers conceive but 20% of those lose their calf, and only about 20% get back in calf during their first lactation. Thus the average heifer only produces one calf in her first 4 years of l ife, and this group consumes a third of the resources of the breeding herd.

The NT data shows a very close relationship between conception and pre-mating liveweight, both for maiden heifers and re-conception the following year.

Figure 5: Maiden Heifers Figure 6: First Lactation Heifers


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There are other factors affecting conception (growth patterns, age, breed, genetic selection, disease) but liveweight has the largest effect. This has been confirmed by a large commercial dataset from the NT (involving 6541 heifers) which shows that the results from the seven stations are closely matched with each other and with the model that predicts pregnancy rate from pre-mating liveweight.

Figure 7: Pregnancy Rates in Heifers of Different Weights – Actual vs Predicted


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This data in tabular form can be used to estimate the financial return of feeding heifers to enhance their weaning performance, and the cost of feed required to make the enterprise break even.

Table 14: Predicted pregnancy of maiden and first lactation heifers based on pre-mating weight

2 year old maiden heifers 3 year old first lactation heifers

Pre-mating weight kg Predicted pregnancy % Pre-calving weight kg #

Predicted pregnancy %

200 50 260 6 220 63 300 11 240 74 340 21 260 83 380 35 280 89 420 53 300 93 460 70 320 96 500 83 340 98 540 91

Table 15: Example of calculating financia l return from feeding heifers Feeding 100 heifers. Weaners taken as averaging 180 kg and with no additional costs of raising the calf to weaning included. Calf loss 15%.

Start End Gain Extra kg Sale price $3.20/kg

Sale price $3.50/kg

Maiden Liveweight (kg) 240 320 80 Conception rate % 74 93 19 29071 $9,302 $10,175 Extra value of 80 kg

gain in 20% culled 1600 $5,120 $5,600

Total $14,422 $15,775 Break-even cost of

feed /kg gain $1.80 $1.97

2nd calf Liveweight (kg) 300 420 120 Conception rate % 11 53 42 64261 $20,563 $22,491 Extra value of 20%

culled 2400 $7,680 $8,400

Total $28,243 $30,891 Break-even cost of

feed /kg gain $2.35 $2.57

Steer growth on Rhodes grass can be taken as averaging 0.7 kg/day, and on that basis heifer growth of 0.6 kg/day might be expected. The maiden heifers would therefore take 133 days to put on 80 kg, and the first calf heifers 200 days to put on 120 kg.

To make feeding heifers pay, pasture costs must be less than break-even costs, which in most cases would not be the case.

It is also apparent that the return from feeding these heifers would be less than feeding steers to market weight. If the feed was used to add 0.7 kg per day to 100 steers instead of heifers, the return in 133 days at $3.50 per kg would be $32,585, and in 200 days it would be $49,000.

1Extra weaner weight produced includes reduct ion by 15% to allow for calf loss

mailto:sale@$3.20

mailto:sale@$3.20

mailto:sale@$3.20

mailto:sale@$3.20


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Table 16: Predicted pregnancy based on pre- joining weight of yearlings

These calculations are clearly an over-simplification, with no consideration for the 2-3 year delay in realising the income arising from feeding heifers, nor the carry-over effect of extra growth of maiden heifers and weight gain as first calf heifers in subsequent years. The figures do however suggest that this strategy of feeding breeding heifers is only likely be adopted when extra feed that is not required for feeding steers is available.

5.2. YEARLING MATING

Providing the extra nutrition from irrigated forages to weaner heifers can enable a high proportion of them to conceive at 12-15 months and calf at 2 years, a year earl ier than usual.

As before, conception depends on liveweight although there is also an effect of age. Yearlings have to be heavier than two-year-old heifers to achieve an equivalent conception rate.

Only the larger heifers at weaning (>200 kg) are l ikely to achieve good conception rates from yearling mating and they need to grow by at least 0.5 kg/day, and preferably 0.75 kg/day, between weaning and joining.

Some words of caution: Yearling mating can result in high rates of dystocia (calving difficulties). This problem can be reduced by mating the heifers with bulls with EBVs for low birth weight. Early mated heifers need to continue on good nutrit ion to avoid problems with high calf loss, subsequent low ferti li ty, and stunting. It is also worth noting that in stations without a tightly controlled mating program, there is often a wide range of calf age and size at weaning. Many of the claims of yearling mating appear to be based on data from larger weaners that are not really yearlings at the time of mating.

5.3. SPIKE FEEDING

Spike feeding is a term used to describe the practice of feeding pregnant heifers in their last trimester of pregnancy a high protein and energy diet for about 50 days before calving. In reaction to this sudden increase in nutrition, the heifers often start cycling early. If the extra feed is provided after the heifers have given birth, they preferentially partition the nutrients to lactation, which is beneficial to the calf but does not have as much effect on re-conception.

Research in North Queensland has shown increased re-conception up to 15% following spike feeding. In the NT an increase of 40% was recorded in some years. The problem for rangeland cattle is that the results are very variable. If the subsequent wet season is very poor, then conception rates remain very low even with spike feeding, and if the season is particularly good, then there are high conception rates overall and the benefit of the spike feeding is lost. This high variability needs to be considered when calculating the economics of spike feeding in rainfed production systems, but the results with irrigation should be more predictable because the quality of subsequent nutrit ion can be assured.

It is also necessary to accurately predict the calving date of the heifers so that the optimum spike feeding period can be precisely targeted.

Pre-joining weight late

November kg

Predicted pregnancy

rate %

220 16

240 24

260 34

280 46

300 58

320 69

340 78


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5.4. RADICAL EARLY WEANING

For a 12 month inter-calving interval that enables calves to be born at the right time of year, cows and heifers have to conceive within 3 months of calving. This is difficult for heifers as lactation is a greater nutritional burden on them because of their lower body weight. An alternative is radical early weaning where calves are weaned off the heifers at 6-8 weeks, giving the heifer the opportunity to cycle and re-conceive, and thus calve again within or near the 12 month interval.

Eight week old calves average about 70 kg with the smallest ones about 60 kg. Until they reach 90 kg, weaned calves will need a fully prepared high protein calf diet. From 90 kg, they can graze irrigated pasture, supplemented by calf pellets. From 100 kg they are able to go ahead on irrigated Rhodes grass, but to maximise growth rates a supplementary supply of protein including bypass protein would be required.

Targeted feeding of heifers

In all cases, good data collection should enable the producer to more precisely target the heifers in the critical weight range that are most likely to benefit from extra nutrition, and thus improve the financial return from the feeding regime.

The best general reference on this subject is the MLA booklet Heifer management in northern beef herds (2012) by Tim Schatz from the NT Department of Primary Industry and Resources. Tim Schatz is also the best source of further information and can be contacted on [email protected].

Further Information


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6. YOU CAN’T MANAGE WHAT YOU DON’T KNOW

The basic data collection needed to make the most of investment in irrigation

To be able to manage a system you require certain critical information otherwise decisions are made on an ad hoc basis and there wil l l ikely be challenges in optimising the production system and ultimately realising a return on your investment in irrigated fodder production.

In a Stand and Graze or a Cut and Carry system the critical information that is required is:

• Dry Matter (DM) production kg DM/ha/d. • Class and weight of animal. • Likely live weight gain (LWG). • Application of the information in some form of feed budget.

6.1. DM PRODUCTION

Knowing the DM production is the key to managing feed supply and cattle.

DM production of tropical grasses is seasonal. It depends on both the minimal night temperature and the maximum day temperature but the night temperature is the more important.

Practically, once night temperature gets below 12oC, DM production virtually ceases and animal numbers need to be reduced and/or rotation lengths increased.

Figure 8: Comparative growth rates for Rhodes grass from various sites (data source WA DPIRD)


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Table 17: DM production of Rhodes grass measured at Pardoo in winter and summer (Kevin Bell) This can be also equated to days of regrowth required before pastures reach the optimal entry herbage mass 3000 kg DM /ha, after the cattle have been withdrawn at the optimal exit herbage mass of 1500 kg DM/ha.

Table 18: Days required for regrowth to reach 3000 kg DM/ha before grazing again ( ie the rotation length) at Pardoo (Kevin Bell)

Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec

Pardoo 12 12 12 13 19 24 27 36 18 15 14 12

How do I measure this?

• Use historical data from a site close by and tables from DPIRD. • Measure it yourself for a period of 12 months and then use this as your historical

record. • Use photo standards. These are available at the end of the document. • Use a calibrated rising plate meter. • In the future, there may be access to satelli te images, simulation models of pasture

growth, drone or quad bike methods.

Procedure if you want to measure it yourself

• You want to calculate herbage mass which is measured as kg DM/ha.

• Sample after a grazing and before the next grazing. • Use a quadrat and clippers (see image 1). The quadrat

can be easily made from PVC pipe to dimensions 50x80cm (0.5m*0.8m). An alternative is 50x100cm but you need to adjust the area calculation for this and any other variation on the 50x80cm quadrat. Clippers or garden shears can be bought from any hardware store. Simple kitchen scales weighing to nearest 10g are needed for weight.

• Cut 3-4 quadrats along a transect line from the centre to extremity of a pivot. Sight the transect line and randomly select a site about each quarter of the transect line.

• Cut to l itter/dead stem height (about 5cm above ground) removing green material only. Place in bag (paper bag best) and weigh. Dry in oven around 70oC if available for 48h. Otherwise assume DM% is 20% for October-April and 25% for May-September.

• Calculate as follows: Fresh weight in quadrat = 300g Assume DM% of 20% so DM in quadrat = 60g (=300*20/100) Kg DM/ha = (DM per area of quadrat)*10000/1000. This converts the value from g DM/square metre to kg DM/ha. There are 10,000 square metres in a hectare and 1000g in a kg. = ((60/(0.5*0.8)) *10000/1000 = 1500 kg DM/ha

Summer Winter

DM production kg DM/ha/d 160 60

Image 1: Example of quadrat and clippers for measuring herbage mass.


33

Image 3: 1,000 kg/ha

If you have to assume the DM%, then use 20% DM between October-April, and 25% DM between May-September.

• Repeat just before next grazing using an area close to original cut or chosen randomly along the transect line as before.

• DM produkg DM/ha/d =((Final (2nd cut) cut herbage mass kg DM/ha) – (Initial (1st ct) cut herbage mass kg DM/ha))/number of days between cuts.

• Note extent of dung and urine patches. Do not cut a dung or urine patch.


Image 2: 500 kg/ha





Estimating dry matter of Rhodes grass (photographs courtesy of Kevin Bell)


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6.2. LIVE WEIGHT GAIN (LWG)

Looking at animals is not a very good way to calculate LWG. You need to weigh animals either on scales in the yards or using a Walk-over-weighing automated system and keep records accordingly.

Things to decide

• Is it necessary to record individual animal ID (NLIS tags)? Yes, this is best practice so you can repeat weigh the same animals each time.

• What if we don’t record animal ID? You must ensure the same total group of animals are weighed each time even if you don’t know their ID. Weights of any animals added or removed must be known.

• How many animals? There is no need to weigh all the animals. You need to weigh at least 40 head over a 60 day period to accurately describe the live weight gain of a mob but it is probably worthwhile starting with 50 head to cover transfers and other losses during the period.

• How long should the interval be between weighings? There is no advantage in weighing less than monthly so it is recommended that you weigh at least every 2 months to get enough of a change in live weight to detect a difference.

• Scales are usually accurate to 1kg, so to detect a LWG of 0.3kg/d you should at least measure the weight change over 60 days.

• Do I need to keep animals off feed overnight in yards and weigh in the morning or weigh straight off pasture as mustered?

→ Research stations usually hold animals in yards overnight with access to water, but no feed, and weigh in the morning. This is the best way as it minimises the effect of variation in gut fi ll , but it is too disruptive for a commercial operation.

→ Commercially, animals could be weighed off the paddock at mustering. Try to muster early before animals go onto water. It is important that the same procedure of time and animal handling is followed each time.

→ Live weight gain (kg/d) = (weight at second weighing-weight at first weighing)/number of days.

• Weighing the same animals each month could give an early warning of substandard weight gain and indicate problems with the pivot, the feed budget, or the recording system. However, more accurate weight gain figures will be calculated from longer time intervals.

Estimation of pasture DM intake and making a simple feed budget

To calculate the pasture intake of an animal accurately, you need to know the weight of your animal, i ts LWG, and its level of activity.

• You can apply the Minson and McDonald (1987) table (available from DPIRD). • You can apply the McLennan and Poppi Quikintake calculator (this can be provided

on request). • You can use the graph in the paper ‘A quick guide to animal nutrition’ derived from

McLennan (2015). • Values can differ depending on which calculator is used and whether account is taken

for energy expenditure in walking. On a pivot, cattle will walk about 2km/d.


35

Taking as an example a 350kg steer 1.5 years old grazing on irrigated pivot Rhodes grass pasture with DM digestibili ty of 65% and LWG of 0.7kg/d.

→ The Minson and McDonald (1987) equation estimated 7.2 kg/d with no walking. → Quikintake calculator estimates 7.8 kg DM/d if walking 2 km/d, or 7.2kg/d if no walking.

A much simpler way is to use a good general figure for consumption of dry matter in tropical Rhodes grass pivots which is 2.4% of l iveweight per day (or 24g DM/kgW/d) which includes energy required to walk 2 km/d. A LWG of 0.6-0.7 kg/d is expected from this pasture. In the following simple feed budget, a 40 hectare pivot has been divided into 4 cells and the number of cattle needed is adjusted to keep the animals in the cell for 5 days and hence 20 days for the whole rotation. Util isation of the feed is estimated to be 50%.

Table 19: Simple feed budget to calculate number of cattle per pivot (4 x 10ha cells)

250 kg steers 350 kg steers

DM start of grazing kg/ha 3000 3000

DM end of grazing kg/ha 1500 1500

Utilisation percentage % 50% 50%

Harvestable DM kg/ha 750 750

Cell size hectares 10 10

Harvestable DM in cell (kg) 7500 (=750*10) 7500

Consumption kg DM per day @ 2.4% W/day (24g DM/kg W/d)

6.0 (=24*250)/1000) 8.4

Grazing days (=harvestable DM/intake/d) 1250 (=7500/6.0) 893

Days to graze cell 5 5

Head required to graze cell 250 (= 1250/5) 178


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7. INTEGRATING IRRIGATED PASTURES INTO BEEF OPERATIONS IN THE KIMBERLEY AND PILBARA REGIONS

7.1. BACKGROUND

Irrigated and fertil ised pastures, either for stand and graze or hay, offer a means of improving the nutrition of cattle, especially during the long dry season when cattle struggle to maintain weight. Most efforts to date have focussed on technical aspects of establishing pivot irrigation systems and learning to manage the irrigated pasture for optimal animal liveweight gain.

Irrigation systems in the Kimberley and Pilbara regions wil l most commonly be integrated into a breeding enterprise and there is as yet l i tt le practical experience on how to do this and what the best options are for improving overall property profitabil i ty. Irrigated forages include both stand and graze and cut and carry (hay and/or silage). See the related section on the relative advantages and disadvantages of Stand and Graze and Cut and Carry. Options for incorporating forages into the beef enterprise include:

• Growing animals more quickly for live export. • Backgrounding of animals destined for feedlots in South West WA. • Hay/silage combined with pellets to grow early weaned calves with early weaning

generating significantly higher calving rates in the breeder herd. • Improving the growth rate of weaner and maiden heifers so that they are

physiologically more mature at the time of first-calving with benefits for the remainder of their breeding li fe.

• Targeted feeding of first-calf heifers before and after calving to improve re-conception rates.

• Breeders using high value animals such as Wagyu.


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7.2. WHAT ARE THE IRRIGATED FORAGE OPTIONS TO ADD VALUE TO A BREEDING ENTERPRISE?

Scenario analysis using pasture, forage and herd models has been used to explore the relative merits of a few of these options compared with a baseline rangeland beef enterprise to which irrigated forage scenarios are evaluated.

Baseline Scenario

No forage: a baseline property of 300,000 ha is used, assuming a mix of Pindan and spinifex country. The property runs breeders and produces young animals (male and female) for l ive export (350 - 400 kg target weight). Sale price is assumed to be $3.00/kg.

Scenario 1

Growing Rhodes grass, Forage sorghum or Lablab hay to feed early weaners (70-100kg) in the yards with additional protein pellets (Rhodes and Forage Sorghum). The aim is to l i ft the calving rate of breeders through early weaning as the way of increasing herd productivity and profitabili ty. The area of irrigated forage can be reasonably modest as it is only used for feeding weaners with any excess hay sold. The area required for irrigated Rhodes grass is about half that of Forage sorghum or Lablab because they are annual crops which grow over 4-6 months compared with year-round perennial Rhodes grass.

Scenario 2

Growing Forage sorghum and Lablab hay in a double crop rotation which is fed to growing maiden heifers over the dry season to accelerate their growth rate and frame development so that they are better able to maintain higher reproduction rates over their l i fetime.

I rrigated pasture area (ha) 0

Herd size (AE) 6,800

Weaning rate (%) 53 Growing animal liveweight gain (kg/head/day) 0.3

Beef produced per year (tonnes) 680

I rrigated pasture area (ha) 100-200

Herd size (AE) 7,100 – 7,400

Weaning rate (%) 62-65

Weaner liveweight gain (kg/head/day) 0.6 – 0.8

Beef produced per year (tonnes) 850-880

I rrigated pasture area (ha) 150

Herd size (AE) 7,200

Weaning rate (%) 62-65 Heifer liveweight gain (kg/head/day) 0.8

Beef produced per year (tonnes) 900


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Scenario 3

Young steers and surplus heifers are grazed on irrigated forage for l ive export with a target weight of 450kg instead of 350-400 kg sale weight under the baseline scenario. Due to the size of animals and number of animals to be grazed over an extended period, the area required for irrigation is substantially larger. Animal growth rates over a year are higher on Rhodes grass than Forage sorghum because the Forage sorghum is only available for 4-6 months of the year and the remainder of the time growing animals are grazing rangeland pastures.

7.3. DOES IT PAY?

Integrating irrigated forages into whole of enterprise beef systems can significantly improve beef productivity and kg beef turned off. The question is does it pay for itself?

Financial analysis of costs and returns shows that a number of scenarios can generate positive operating returns where beef prices are greater than $3.00 kg. The costs of production can be high, especially for stand and graze scenarios where uti lisation rates are often only around 50% because the high stocking rates lead to trampling of pasture. That means for a total pasture production of 35 tonnes dry matter/ha per year, only about 17 to 18 tonnes can be util ised in a stand and graze scenario. However, if that same 35 tonnes dry matter/ha is being cut for hay then around 30 tonnes can be harvested.

Rhodes grass in particular has a high cost of production because of the large amount of water required (15-20 ML/ha/year) with associated pumping costs where relevant, and the large amount of ferti liser (800 – 1000 kg Nitrogen/ha) that needs to be applied. Consequently, costs of production can be in the order of $4,500 - $5,000/ha. For a well managed Rhodes grass pasture producing 35

Rhodes grass

Forage sorghum

I rrigated pasture area (ha) 250 350

Herd size (AE) 7200 7100

Weaning rate (%) 56 56

Grower liveweight gain (kg/head/day)

0.65-0.70 0.45-0.50*

Beef produced per year (tonnes) 1050 900

*Averaged over 365 days. Growth rates while on irr igated Forage sorghum are 0.7-0.8 kg/day


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tonnes of dry matter/ha/year and an effective grazing uti lisation rate of 50%, then around 6-8 animals/ha can be carried in a stand and graze situation. With a good animal growth rate of 0.7 kg/hd/day then one hectare can produce 1,500 to 2,000 kg beef. At $3.00/kg sale weight, then the returns per hectare are $4,500-$6,000 system, which is just greater than the costs of production. However, this assumes good agronomic and animal management. Any lapse in management or running into bad weather conditions (e.g. extended wet, cyclone) means pasture quality and animal performance will suffer. There is li ttle margin for error simply to break even. This is highlighted in Table 1 which shows the costs of production ($/kg beef) for stand and graze irrigated forage for a range of average daily gains and annual pasture yields. This analysis assumes input costs of $5,000/ha. Keeping costs of production per kg of beef below $3.00/kg requires pasture production of around 30 tonnes dry matter/year and average daily gains of about 0.7 kg/hd.

Table 20: Costs of production ($/kg beef) for stand and graze irrigated forage for a range of average daily gains and annual pasture yie lds.

Average daily gain (kg/hd) Pasture production/year or season (T dry matter/ha)

8 10 12 15 20 25 30 35 40 0.3 $24.15 $19.32 $16.10 $12.88 $9.66 $7.73 $6.44 $5.52 $4.83 0.4 $18.59 $14.87 $12.39 $9.91 $7.44 $5.95 $4.96 $4.25 $3.72 0.5 $15.26 $12.21 $10.17 $8.14 $6.10 $4.88 $4.07 $3.49 $3.05 0.6 $13.04 $10.43 $8.69 $6.96 $5.22 $4.17 $3.48 $2.98 $2.61 0.7 $11.46 $$9.17 $7.64 $6.11 $4.58 $3.67 $3.06 $2.62 $2.29 0.8 $10.28 $8.22 $6.85 $5.48 $4.11 $3.29 $2.74 $2.35 $2.06 0.9 $9.36 $7.49 $6.24 $4.99 $3.75 $3.00 $2.50 $2.14 $1.87 1 $8.63 $6.91 $5.76 $4.60 $3.45 $2.76 $2.30 $1.97 $1.73

1.1 $8.04 $6.43 $5.36 $4.29 $3.21 $2.57 $2.14 $1.84 $1.61 1.2 $7.54 $6.03 $5.03 $4.02 $3.02 $2.41 $2.01 $1.72 $1.51

This particular analysis assumes input costs (fert i l iser, i rr igation, labour, pumping etc) of $5000/ha. A separate Excel spreadsheet calculator is available to explore dif ferent input cost, pasture product ion and l iveweight gain opt ions.

Forage sorghum and Lablab are annual crops requiring less inputs, especially Lablab because it is a nitrogen-fixing legume, and so costs of production range from $2,000 - $3,000/ha. They do however produce much less forage than Rhdes grass.

For stand and graze, increases in net enterprise profit over the baseline scenario can range from 5% to 50% in the best cases. The profit increases are relatively higher for the scenarios where a smaller area of hay is grown to improve reproduction rates i.e. Scenario 1 (early weaning) and Scenario 2 (feeding heifers to stimulate l i felong calving rate).

However, the capital costs of development must be considered when evaluating the value of the investment. An improvement in operating returns is alone not sufficient to justify development. Capital costs of development can range from $10,000/ha to $40,000/ha, noting that early adopters have mostly incurred development costs at the higher end of the scale. With these capital costs it requires a significant increase in net returns to generate a “break-even” net present value. This is highlighted in Table 2 below which shows the gross margins ($/ha) required to generate a break-even net present value, assuming a range of discount rates.


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For example, assuming a $20,000/ha capital cost of development and a 7% discount rate on that investment, a net return of $2,048/ha is required to achieve a break-even position on the capital costs of development (see Table 2). If the irrigation development is 500 ha then that is a capital cost of development of $10,000,000. Net returns of $1,024,000 (500 ha x $2,048/ha) are therefore required from that irrigation development just to meet the capital costs of development. For a 300,000 ha beef enterprise in the Pilbara, achieving reasonable weaning rates and turning off animals for live export, based on current beef prices then net returns of approximately $1,000,000 are achievable. The 500 ha irrigation development in effect needs to double that net return to justify its investment.

Table 21: Return needed to achieve a break-even position for different levels of capita l expenditure and different discount rates

EQUIVALENT ANNUAL COST OF DEVELOPMENT ($/ha)

Disount Rate Capital costs of development ($/ha)

$5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $40,000 3% $368 $735 $1103 $1470 $1838 $2205 $2941 7% $512 $1024 $1536 $2048 $2560 $3072 $4096

10% $634 $1269 $1903 $2537 $3172 $3806 $5075


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8. INDICATORS TO ASSESS THE PROFITABILITY OF IRRIGATED FORAGE

8.1. INTRODUCTION

When you are making the decision to invest in irrigated agriculture, it is useful to use a process and indicators that help you compare the irrigation project with other options that you could direct capital and labour towards, either on or off farm. A detailed budget scenario that assesses the likely responses, costs and benefits for your property, implementing your particular irrigation scenario, will assist you to gather the best available data to think through the key risks and how to manage them, and wil l also help you to attract the necessary funds, either from the bank or some other investor.

Applying an appropriate framework to decision making and understanding the reasoning behind the process wil l point roughly which direction to go. It wil l not supply the “answer”, but the following process may assist you to determine if your capital development expenditure is enhancing the long term profitabili ty and resil ience of your beef business.

Opportunities for improving performance are specific to your unique resources, management system and business goals. An investment in irrigated forages that improves the performance of other properties in the region may not be the most profitable option for your property.

Irrigation is a relatively large investment for a beef business, at this stage with relatively unknown returns. It has the potential to improve profitabili ty and resilience, but it is not widely proven. It is worth re-looking at your existing business and the latest research to be convinced there are no other areas or opportunities to capture profitabili ty gains with a lesser risk profi le.

Experienced irrigation managers in the region warn that this change in direction requires a massive commitment, and it is well worth taking the time to visit other irrigators and to undertake a detailed budget scenario. This section outlines how to use some of the most common economic and financial indicators that you may hear bandied about and explains how they relate to each other. Spreadsheet calculators to allow you or your advisor to prepare your own figures with these indicators are included in the Technical Supplement, available on request from the KPCA.


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8.2. INDICATORS TO COMPARE THE RELATIVE BENEFITS OF DIFFERENT BEEF HERD MANAGEMENT OPTIONS

The first step is to construct a gross margin for each of the potential enterprises to assist you to work out the most profitable use of the irrigated land, for example a cut and carry hay operation, or grazing different cattle classes. A gross margin refers to the total income derived from an enterprise less the variable costs incurred directly attributable to the enterprise. For gross margin analysis in a livestock enterprise, gross income takes into account the value of any changes in l ivestock numbers.

When long-lived crops such as Rhodes grass are being compared to annual crops, the average annual gross margin, with allowance for the establishment costs of the long-lived crop, can provide a guide to relative profitabili ty.

Once the irrigation project has commenced, gross margins can be a useful tactical tool for annual decision making, to complement your own experience and data when deciding the most profitable use of the land.

Gross Margins are usually quoted per unit of the most limiting resource. Important indicators for irrigated fodder are:

Area (GM/ha) – most useful for comparing annual crops such as harvesting maize or sorghum. Gross margin per hectare can be used as the basis for comparison of l ivestock and cropping activities from an irrigable area, so long as that l ivestock activity is completely separate and does not impact other l ivestock operations on the rest of the property. If i t does, say in the case of feeding first calf heifers, it is more appropriate to use the herd gross margin indicator below. If comparing a stand and graze option with cut and carry on this indicator for the pivot area only, it is important that the calculation allows for the cattle to be “bought” from the rangeland beef business at current market price.

Water use (GM/ML) – most useful for comparing the efficiency of water use in a given production system where water is limited and irrigable land is not.

Herd Gross Margin - most useful for comparing the effects on whole of herd profitabili ty. Introducing an irrigated fodder development will have flow-on effects through the herd that must be accounted for, in addition to the extra gain, income and expenditure generated from the cattle directly grazing the irrigated area. This would be the most important indicator to compare the relative profitabili ty of using irrigated forages for different classes of cattle, such as weaners, steers of varying ages, or first lactation heifers.

8.3. PRACTICAL IMPLICATIONS FOR GROSS MARGIN BUDGETING AND ANALYSIS

All of the producers interviewed to produce this booklet stressed the danger in assuming that you can achieve optimum yields straight away and avoid costly mistakes as you gain experience. The benefit of using spreadsheet tools is that you can, to an extent, counter these unknowns with multiple scenarios of conservative estimates. Strategies for managing risks to your cashflows and operations can be demonstrated by using a tool with tables showing sensitivity to price and yield.

Another practical tip for generating your own GM, or using others as a guide, is to understand how labour has been accounted for, and ensure that no expenses that ought be counted as overheads are caught up in the direct costs used in the gross margin analysis.


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Ready reckoners such as the calculator found in the “Integrating irrigated pastures into beef operations in the Kimberly and Pilbara” can be used to obtain back-of-envelope style analysis in conjunction with predicted gross margins as to potential capital returns. However more complex analysis is required to account for changes such as unpaid labour, herd structure, capital and also to incorporate the timing of the costs and benefits to the herd in the implementation phase. The Breedcow Dynama tool (available for download as described in the section on Tools below) is useful for generating herd gross margins that allow for the timing of implementation and its effect on the herd. It does allow for incorporating a capital investment, but it doesn’t allow for a detailed breakdown of the irrigation infrastructure costs, nor does it assess crop options. The DPIRD Enterprise Analysis Tool contains some ‘Best Bet’ GM data for cut and carry and crop options in the region, and you are encouraged to contact DPIRD to discuss how applicable they are for your situation.

Gross margins are a first step in determining the return on investment in irrigated fodder, but alone they do not indicate whether the strategy will be a more or less profitable use of funds compared to the base operating system or other alternatives. To make this assessment, it is necessary to conduct an economic analysis that applies a marginal perspective.

8.4. USING INVESTMENT ANALYSIS TO COMPARE OPTIONS

The ultimate criteria to judge a potential change to a beef enterprise is the extra return on additional capital invested (marginal return) that is l ikely to result, weighed up in the context of the extra enterprise risk and financial risk associated with the change, and whether that capital could be invested elsewhere to get a superior return.

Economic and financial criteria can be used to compare alternative investments. For example, the returns on the proposed irrigation project can be compared with returns from other potential improvements to the beef business such as fencing, waters or segregation systems, or to off-farm investment opportunities such as real estate or shares.

8.4.1. Economic and financial criterion used to assess irrigation projects “Economic assessment helps to answer the question “What is the most profitable use of l imited resources - capital, labour and land?”

Irrigation projects require new equipment and additional infrastructure investment and need to be assessed over their l i fetime costs and benefits. Given that most modern irrigation infrastructure and equipment has an economic li fe of three decades or so, the assessment of costs and benefits should extend for the same period of time.

The standard measures of return on capital are Net Present Value (NPV) at the required rate of return and Internal Rate of Return (IRR) .

The common situation for irrigation development across northern Australia is that the initial investment in land has been made and the concern is to increase productivity. In this case the appropriate method to use is marginal analysis - using partial discounted net cash flow budgets to define NPV at the required rate of return and the IRR.

Such partial budgeting will provide an estimate of the extra return on extra capital invested in developing the existing operation. This is the key criteria for assessing investment opportunities where the improved productivity of an existing beef operation is targeted.


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A present value model is a mathematical relationship that depicts the value of discounted future cash flows in the current period. It provides a measure of the net impact of the investment in current value terms taking into account the timing of benefits and costs over the li fe of the investment. NPV is the sum of the discounted values of the future income and costs associated with the change in the herd or pasture management strategy and is calculated as the incremental net returns over the l i fe of the investment, expressed in present day terms, since a dollar today is worth more to you now than receiving the same dollar next year.

8.4.2. Financial criteria used to assess irrigation projects Financial indicators provide an understanding of how the project deemed to be most profitable by the economic indicators can be funded and managed with a viable cash flow.

The initial financial criteria are peak deficit, the number of years to the peak deficit, and the payback period in years.

Peak deficit is the maximum difference in cumulative net cash flow between the implemented strategy and the base scenario over the period of the analysis. It is compounded at the discount rate and is a measure of riskiness.

The payback period is the number of years it takes for the cumulative net cash flow to become positive. The cumulative net cash flow is compounded at the discount rate and, other things being equal, the shorter the payback period the more appealing the investment.


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8.4.3. A scenario model As it is difficult to access commercially sensitive data from an actual property, a scenario modell ing approach using a representative property of average size and performance has been generated to show an example of how different production options affect profit. This is based on regional data from north Queensland and the Northern Territory. These outputs are for a specific situation and are shown only as a guide to how the indicators can be used to compare strategies. There is no suggestion that any of these options may be the most profitable for your particular situation. The Technical Supplement available from KPCA on request includes a document entitled “Improving the performance of beef herds in Northern Australia” which contains full details of the method and results of each analysis.

Table 22: Assessment of some development options for North Austra lian cattle properties

Strategy NPV of change

Annualised NPV

Peak deficit (with

interest)C

Years to

peak deficit

Payback period (years)

IRR (%)

Northern Gulf, Queensland Home-bred bulls $255,400 $16,600 -$25,000 2 3 59 Genetic improvement of weaning rate $103,900 $6,800 n/c never never n/c

Supplementing first-calf heifers -$53,500 -$3,500 -$147,000 never never n/c

Stylo for steers, 500 ha paddock $266,000 $17,300 -$92,700 6 9 20

Molasses production mix for steer tail -$90,500 -$5,900 -$252,500 never never n/c

Silage for all steers -$282,300 -$18,400 -$784,000 never never n/c Katherine region, Northern Territory P supplementation, entire herd $5,106,300 $332,300 -$328,300 1 2 152

Herd segregation, $100,000 capital $2,843,400 $185,000 -$100,000 1 1 235

Home-bred bulls $424,600 $27,600 -$78,400 2 3 40 Supplementing first-calf heifers -$1,075,700 -$70,000 -$3,001,500 never never n/c

Stylo for all steers $2,282,500 $148,500 -$506,100 8 11 n/c Concentrate feeding the steer tail -$479,100 -$31,200 -$1,344,300 never never n/c

*The tools and references describing how the data for this table was generated are outlined in the references section.

DPIRD are currently developing local examples of how an irrigation project may affect the investment return on Kimberley and Pilbara beef businesses different development scenarios.

The best data to use as a basis for your plans would of course come from irrigation systems in your region combined with the knowledge of the managers operating them. Although some projections indicate that operating rates of return will be modest or negative, due to high initial capital costs, Kimberley and Pilbara producers who have invested in irrigation infrastructure have stated a number


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of additional reasons why they consider this investment worthwhile: • Having the opportunity to drought and fire-proof their operation, and the difficulty in

placing a monetary value on increased business resilience. • Preventing costly weed incursions through access to clean hay. • Securing hay in years of shortage. • An upswing in capital value of the property through being more diversified in income

streams and market opportunities. • The opportunity to capture the future value of water through l icensing. • Being positioned to take advantage of spikes in prices that are greater than could be

normally be included in a budget. • Having the option to move into higher value crops in the future. • Expectation of future benefit from the infrastructure past the year investment horizon. • Being bullish about world food shortages in the future including the risk of future global

pandemics.

Many of these factors are intrinsic and almost impossible to place a value on, so the full range of reasons why an investor may justify this capital expenditure is difficult to capture in a scenario.

8.5. PRACTICAL IMPLICATIONS AND PRODUCER EXPERIENCE

The results of the analysis are only as good as your assumptions, the quality and regional relevance of the historical production data that you use, and your abil i ty to predict how the system may operate in the future. Producers in the region have advised that when they first started a stand and graze system, their steers gained an average of 0.3 kg /day, but now with experience gains of 0.7 kg/day can be routinely achieved.

The available spreadsheet tools provide valuable insight into the parameters which are the most critical for the success of the operation. Undertaking a sensitivity analysis of factors such as growth rates, hay yields, interest rates and prices, allows you to run best, worst and expected scenarios for each of these variables, and thus be better prepared to manage risk.

Local producers wil ling to share their data and experience, and experienced extension officers who understand how to incorporate commercial and trial data into investment models, are invaluable in this process. You should ensure that any consultants providing production advice have had significant exposure to local conditions and an understanding of the peculiarities and pitfalls of undertaking development in the north of Australia.

8.6. INDICATORS TO COMPARE THE RELATIVE PRODUCTION COST OF A UNIT OF BEEF OR HAY

Cost of Production (COP) for a beef enterprise is measured in $ per kilogram liveweight or dressed weight.

The benefit of undertaking Cost of Production (COP) analysis is you are looking at actual historical data. Having this data collected, assembled and analysed is a great start in benchmarking against yourself between years or with other properties in the region, allowing you to identify the need for improvements in productivity.

Recent project benchmarking from DPIRD’s business innovation project showed the average cost of production from rangeland beef businesses in the northern regions of WA.


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Table 23: Cost of Production (COP) liveweight from rangeland beef businesses in the Kimberley and Pilbara

The section “Integrating irrigated pastures into beef operations in the Kimberly and Pilbara” shows a production calculator (Table 1) for different combinations of performance and price. This could show potential investors in irrigated forage the type of performance required from the irrigation enterprise if i t is to exceed returns from a rangeland beef business. A COP calculator is also included in the Technical Supplement.

8.7. PRACTICAL IMPLICATIONS OF USING COP ANALYSIS

If you are comparing your results to someone else’s, make sure you are comparing apples with apples. It is important to collect accurate data in a standardised way, for example ensuring cattle are weighed with the same curfew each time and being able to determine if input costs such as ferti liser include freight and handling. It is also important to maintain consistency in how labour is accounted for.

Results should be interpreted with caution. Sometimes COP may identify opportunities to improve productivity, but in some cases year to year differences can be explained by seasonality or changing input prices. Longer term averages, at least 3, and 5 years, that smooth out the annual variation are better.

Cost of Production is not the best indicator to assess the profitabil i ty of investing in irrigation infrastructure when comparing rangeland production with stand and graze or cut and carry systems. Amongst other l imitations, it does not adequately allow for flow-on changes in herd structure, carrying capacity or capital value from integrating these systems into a rangeland beef business. Nor does it consider the time lag in realising the benefits through the implementation phase. While COP is a factor in profitabili ty, as a tool it does not provide a base for any of the marginal analysis outlined above, and therefore does not provide insights into whether other options would be a more profitable way to invest capital.

Tools

• DPIRD Enterprise Assessment Tool. • Breedcow Dynama – Available for download at https://www.daf.qld.gov.au/animal-

industries/beef/breedcow-and-dynama-software • QDAF Gross Margin spreadsheets.

Region Average Businesses East Kimberley 2.13 10

West Kimberley 1.80 16

Coastal Plains 1.58 6

East Pilbara 1.21 7

West Pilbara 1.67 15

Grand Total 1.73 54


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References

• Holmes WE, Chudleigh F and Simpson G (2017) ‘Breedcow and Dynama herd budgeting software package. A manual of budgeting procedures for extensive beef herds.’ (State of Queensland, Department of Agriculture and Fisheries: Brisbane, Qld). Available at https://www.daf.qld.gov.au/animal-industries/beef/breedcow-and-dynama-software [Verified February 2020].

• Department of Primary Industry and Regional Development, Western Australia (2019) Key Performance Indicator Data received from the Business Improvement Grants Program, Broome.

Thank you to the producers who provided valuable experience in workshops and on property visits.

Chudleigh F, Oxley T, Bowen M (2019b) ‘Improving the performance of beef enterprises in northern Australia.’ (The State of Queensland, Department of Agriculture and Fisheries: Brisbane, Qld) available at https://www.daf.qld.gov.au/animal-industries/beef/breedcow-and-dynama-software

A number of references produced by CSIRO that outl ine potential modelled returns of irrigated agriculture are included in the Technical Supplement.

Further Information

https://www.daf.qld.gov.au/animal-industries/beef/breedcow-and-dynama-software

https://www.daf.qld.gov.au/animal-industries/beef/breedcow-and-dynama-software


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9. MARKET OUTLOOK FOR CATTLE OFF IRRIGATION IN THE NORTH OF WA

9.1. SUMMARY

In 2019, live cattle exports in WA were worth around $321 mill ion with 355,000 head of cattle exported (just under 30% of Australia’s total). Indonesia was the main market (38%) followed by Israel (23%), United Arab Emirates (15%) and Vietnam (12%). Based on the distribution of cattle herd across WA’s regions, cattle from the rangelands/pastoral estate is estimated to account for approximately 88% of WA’s live exports with l ive exports of Kimberley cattle estimated to be worth approximately $178 mill ion, the Pilbara $63 mill ion and the Southern Rangelands $43 mil lion. This does not allow for the additional value of domestically processed cattle. Kimberley and Pilbara cattle are exported through Northern and Southern WA ports with Kimberley cattle also being exported out of Darwin.

Australian cattle prices, including for live export, have generally been strong in recent years. Meat and Livestock Australia has forecasted that cattle supply will continue to tighten over the next two years, as by mid-2020 the size of the Australian herd wil l be at its lowest level since 1992. However COVID-19 has brought considerable uncertainty into all future market predictions, and as of May 2020 there have been pricing corrections in both Indonesia and Vietnam as key Northern Australian l ive export markets. There is on average about a 20% difference in export prices offered in the wet season when supply is low, compared to those on offer in the middle of the dry. This is an obvious opportunity that producers with irrigated fodder are able to exploit, and producers should be able to count on a premium through this period.

However the firm conclusion from both the export and domestic market sources consulted for this project was that the Kimberley and Pilbara regions wil l only attract significant attention when the region is able to achieve a critical scale and supply a consistent volume, for instance being able to consistently fill an export ship on a regular basis. The use of irrigated fodder should make this goal achievable in time and give the region’s producers more market power than they currently have. Forward contracting could provide positive outcomes for all parties.

The main export market of Indonesia remains focused on smaller cattle, less than 350kg, but there are markets for heavier cattle (400+ kg) such as Vietnam, and signs that other markets for heavy cattle are evolving. Further, Israel/the United Arab Emirates are key markets for WA Rangelands cattle, specifically bulls.

9.2. DEMAND FOR BEEF

The Australian herd in 2020 is expected to reach its lowest level for 20 years, and if rains continue in Queensland and the south, cattle availabil ity will further decrease as producers will look to retain and buy animals to rebuild herds. Demand for beef has also increased due to Africa Swine Fever in China. At the time of writing, there has been a price correction in Indonesia, in response to COVID-19 coupled with a significant depreciation of the Indonesian Rupiah against the US dollar. There


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has also been a price correction in Vietnam. It remains to be seen at this time what longer term impacts COVID-19 may have on demand for l ive exports.

9.3. LIVE EXPORT

Production systems in the Pilbara and Kimberley regions remain focused on the l ive export market to Southeast Asia, with the key markets being Indonesia, Vietnam, Israel and the United Arab Emirates. China has taken a few shipments from Northern Australia though the current health protocol and seasonal timing has l imited further development of direct shipments at this stage. Although steers make up the largest percentage of live export sales, bulls are preferred in many markets. However, management of bulls does not suit all pastoral stations. Heifers are exported to Indonesia and Vietnam, but they are not the preferred product and often are discounted. Some cows are exported to Malaysia and Philippines though again these are opportunistic markets. Export vessels range in size considerably. A mid-size vessel holds around 2,500 slaughter weight cattle for a SE Asian voyage and therefore this is the minimum number needed to attract an export vessel to the region outside the normal dry season period. The length of voyages to SE Asia can range between 10-24 days return. Export contracts are generally committed months in advance, but exporters have the abili ty to redirect vessels to a loading port on the return leg if cattle are available. Cattle are required to be delivered to the export quarantine yard at least 24-48 hours prior to loading the vessel. On-property selection often takes place just prior to loading the trucks for delivery to the quarantine facil ity.

Since not all stations will have the capacity or suitable natural resources to set up their own irrigation, there is a potential business opportunity for an aggregation facil i ty to provide access to irrigation on a lease, agistment, or custom feeding basis.

9.4. INDONESIA

Indonesia remains the key market with 550-650,000 head being exported annually from Australia. The 350kg limit has impacted the production system across both regions, moving away from slaughter weight to feeder steers and heifers being turned off between 270-349Kg. Although this regulation has been relaxed in recent times, the 120-day holding period remains in place in Indonesian feedlots, meaning that buyers are not interested in heavier cattle as they will become too fat for the domestic market.

9.5. VIETNAM

Vietnam has now developed to be a reliable and consistent market importing 200-300,000 annually from Australia, focusing on slaughter cattle 480-600kg. This provides an alternate market for those cattle too heavy for Indonesia and provides an alternative market opportunity either for stations with irrigation or those able to hold cattle over for another year (season permitting).New and emerging markets often begin with importing slaughter cattle 480kg+ to reduce holding periods and costs.


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Importation of feeders normally comes later. Vietnam has now moved to a mix of feeder and slaughter cattle to be able to value add locally, and to have better control over consistency of supply.

9.6. ALTERNATIVE MARKETS FEEDING THROUGH TO CHINA

The continued appetite for protein in China has re-opened interest in countries in the South East Asian region looking at opportunities to supply the China market. Large scale feedlots and abattoir facili t ies, funded by Chinese companies, are being built along the Chinese border in Laos and Myanmar. These facili t ies are reported to be nearing completion and are expected to be seeking to import cattle in the near future. These facili ties could become major export destinations, though there are logistics hurdles sti ll to be overcome, particularly passage through Vietnam or Thailand both of whom have their own import protocols. When and if these markets wil l develop wil l depend on the price being offered. As is the case with Vietnam, the market is expected to start with slaughter cattle and gradually shift towards feeders. Considerable infrastructure has previously been developed in Cambodia to potentially supply local and export markets, however this market has not developed.

9.7. USE OF IRRIGATION TO TARGET HIGHER PRICES

The table below, derived from MLA market information, shows the difference in prices paid for feeder steers in Darwin between the mid dry season (May-June) when supply is plentiful and the wet season (December-February) when supply is low. The average variation over the year, in the last nine years, has been 20.3% The data from Broome is too limited to draw up a similar comparison but the principle would be the same as Darwin. This provides a significant opportunity for Kimberley and Pilbara producers with access to irrigation.

Table 24: Pricing, Darwin Light Steers 2011 - 2019

DARWIN LIGHT STEERS

Year $/kg low dry season

$/kg high wet season

% variation

2011 $2.05 $2.27 9.7% 2012 $1.75 $1.90 7.9% 2013 $1.50 $2.30 34.8% 2014 $1.86 $2.70 31.1% 2015 $2.53 $3.75 32.5% 2016 $2.80 $3.75 25.3% 2017 $3.23 $3.36 3.9% 2018 $2.66 $3.32 19.9% 2019 $2.80 $3.40 17.7%

An expansion of irrigation/feedlot production systems in the Kimberley/Pilbara regions would provide an opportunity for a more consistent supply of increased numbers and quality to allow both export and domestic markets and processors to confidently commit to developing supply chains from the region. Currently cattle coming off irrigation are mainly sought to top up vessels rather than be the sole reason a vessel is brought to the region. There was however a shipment in February 2019 from Port Hedland that was diverted from Townsville due to the North Queensland floods that was


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supplied with cattle from stations between Port Hedland and Broome with access to irrigated fodder production. This represented an early shipment for the usual Northern WA muster season of April to October and was in a dry wet season.

9.8. DOMESTIC MARKETS

The alternate to l ive export for those cattle outside export specifications has traditionally meant cattle being moved south for processing and or backgrounding, or north to flood plain country to grow out and add weight. The development of AACo’s Livingstone abattoir and the Kimberley Meat Co (KMC) abattoir between Broome and Derby have provided alternate markets. The closure of the Livingstone abattoir provided greater access to cattle for KMC but lack of year-round supply has meant that KMC is sti ll only open for the Northern WA muster season. An established regional irrigated beef production system providing a consistent and accessible supply of slaughter weight cattle could provide an opportunity for facil i ties l ike KMC and other domestic markets to expand their seasonal operations to meet market demand. Access to cattle off irrigation could provide opportunities to fi ll shortfalls in supply chain contracts, giving producers premium prices for cattle available at short notice.

The opportunity to background cattle and forward contract pastoral cattle through southern feedlots remains an option and would provide further opportunity for pastoral production systems. The prospect of cotton and grain (maize/corn) industries on the Ord provides a possible boost to the development of a significant feedlot industry based on a cut and carry production system.

9.9. WELFARE

Given that traditional cattle management in the region occurs during the cooler months/dry season, it is important to remember that moving to an irrigated production system requires all year-round management. Management of cattle and staff through the hotter and humid periods therefore requires consideration of the risks to both animal and human welfare.

KEY POINTS • Market demand for Australian cattle is expected to stay strong even in light

of recent COVID-19 pricing corrections in Indonesia and Vietnam. • Kimberley and Pilbara irrigators are potentially able to access premium

prices by supplying cattle in the wet season when supply of rangeland cattle is restricted.

• However, to attract serious attention from both export and domestic markets, and thus acquire more market power, the region will have to work together to achieve a critical scale and supply a consistent volume. Expansion of irrigation should help to achieve this.


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10. LIST OF ELECTRONIC TECHNICAL SUPPLEMENTS

The Technical supplement to this booklet is available either in electronic form from the KPCA or via the attached USB stick to hardcopy versions of this booklet. It contains reference documents, spreadsheets and datasets that may assist producers and advisors carrying out more detailed investigations of irrigated fodder production.

Ash A, Cossart R, Ham, C, Laing A, MacLeod N, Paini D, Palmer J, Poulton P, Prestwidge D, Stokes C, Watson I , Webster T, and Yeates S (2018) Agricultural Viabil i ty in the Fitzroy catchment. A technical report from the CSIRO Northern Australia Water Resource Assessment, part of the National Water Infrastructure Development Fund: Water Resource Assessments, CSIRO, Australia.

Ash A (2020) Cost of production spreadsheets

• Stand and Graze Cost of Production Calculator • Stand and Graze Cost of Production Calculator Simple V3

Benvenutti M (2017) University of Queensland. Series of three articles prepared for the northern dairy industry Northern Horizons publication:

• Pasture structure and selective grazing • Management of grazing intensity and pasture utilisation • Grazing management targets and strategies

Chudleigh F, Oxley T, Bowen M (2019) Improving the performance of beef production systems in Northern Australia. Economic analysis of a number of alternative herd management strategies.

DPIRD Enterprise Assessment Tool Pasture Hay Model. Decision support tool on Excel platform.

Giovi Agriculture (2019) Irrigated Fodder and Grazing Animal Production Systems Analysis KPCA Stage 1 – Literature Review and GAP Analysis

MacLeod ND, Mayberry DE, Revell D, Bell LW and Prestwidge DB, CSIRO (2018) An exploratory analysis of the scope for dispersed small-scale irrigation developments to enhance the productivity of northern beef cattle enterprise. The Rangeland Journal https://doi.org/10.1071/RJ18026. Paper presenting a summary of the methods, results and conclusions of case studies modelling irrigation development in the Burdekin, the Barkly Tableland and the Kimberley.

Meat and Livestock Australia : Market statistics

• Livestock export prices calendar years 2000-2020 • Livestock export prices monthly 2000-2010 • Livestock export prices monthly 2011-2020

https://doi.org/10.1071/RJ18026


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Meat and Livestock Australia (2006) Beef Cattle Nutrit ion: an introduction to the essentials.

Monjardino M, MacLeod N and Prestwidge D (2014) Does it pay to integrate irrigated forages in a beef cattle breeding operation in north Queensland? Paper prepared for presentation at the 58th AARES Annual Conference, Port Macquarie, New South Wales, February 4-7, 2014

Department of Water - Water for Food Program, Mowanjum Irrigation Trial Factsheets (2017) published for the October 2017 KPCA Mowanjum Field Day:

• Irrigation Management on Pindan sands • Mowanjum station manager – Mick’s Tips • Financial Management of Stand and Graze • Alternative fodder options for irrigated fodder

Poppi DP (2020) University of Queensland. Collated data of cattle performance on irrigated forage. Unpublished dataset compiled for the KPCA.

Schatz T . Northern Territory Department of Primary Industry and Resources. Information on improved heifer production

• Heifer Manual (2012) Heifer management in Northern Beef Herds 2nd edition Meat and Livestock Australia

• Heifer management and the importance of body condition pdf • Supplementation – focus on weaner heifer management pdf • Maiden heifer conception rate predictor excel file

Stokes C, Addison J, Macintosh A, Jarvis D, Higgins A, Doshi A, Waschka M, Jones J, Wood A, Horner N, Barber M, Bruce C, Austin J and Lau J (2017) Costs, benefits, institutional and social considerations for irrigation development. A technical report to the Australian Government from the CSIRO Northern Australia Water Resource Assessment, part of the National Water Infrastructure Development Fund: Water Resource Assessments. CSIRO, Australia.

Documents

The Department of Primary Industries and Regional Development … · 2020. 9. 25. · FOREWORD . The publication of this booklet, as a key deliverable for the KPCA Irrigated Fodder