Rangeland profitability in the northern Gulf region of Queensland: understanding beef business complexity and the subsequent impact on land resource management and environmental outcomes

The farm-gate value of extensive beef production from the northern Gulf region of Queensland, Australia, is ~$150 million annually. Poor profitability and declining equity are common issues for most beef businesses in the region. The beef industry relies primarily on native pasture systems and studies continue to report a decline in the condition and productivity of important land types in the region. Governments and Natural Resource Management groups are investing significant resources to restore landscape health and productivity. Fundamental community expectations also include broader environmental outcomes such as reducing beef industry greenhouse gas emissions. Whole-of-business analysis results are presented from 18 extensive beef businesses (producers) to highlight the complex social and economic drivers of management decisions that impact on the natural resource and environment. Business analysis activities also focussed on improving enterprise performance. Profitability, herd performance and greenhouse emission benchmarks are documented and discussed.

Is land condition a useful indicator of soil organic carbon stock in Australia?

The grazing lands of northern Australia contain a substantial soil organic carbon (SOC) stock due to the large land area. Manipulating SOC stocks through grazing management has been presented as an option to offset national greenhouse gas emissions from agriculture and other industries. However, research into the response of SOC stocks to a range of management activities has variously shown positive, negative or negligible change. This uncertainty in predicting change in SOC stocks represents high project risk for government and industry in relation to SOC sequestration programs. In this paper, we seek to address the uncertainty in SOC stock prediction by assessing relationships between SOC stocks and grazing land condition indicators. We reviewed the literature to identify land condition indicators for analysis and tested relationships between identified land condition indicators and SOC stock using data from a paired-site sampling experiment (10 sites). We subsequently collated SOC stock datasets at two scales (quadrat and paddock) from across northern Australia (329 sites) to compare with the findings of the paired-site sampling experiment with the aim of identifying the land condition indicators that had the strongest relationship with SOC stock. The land condition indicators most closely correlated with SOC stocks across datasets and analysis scales were tree basal area, tree canopy cover, ground cover, pasture biomass and the density of perennial grass tussocks. In combination with soil type, these indicators accounted for up to 42% of the variation in the residuals after climate effects were removed. However, we found that responses often interacted with soil type, adding complexity and increasing the uncertainty associated with predicting SOC stock change at any particular location. We recommend that caution be exercised when considering SOC offset projects in northern Australian grazing lands due to the risk of incorrectly predicting changes in SOC stocks with change in land condition indicators and management activities for a particular paddock or property. Despite the uncertainty for generating SOC sequestration income, undertaking management activities to improve land condition is likely to have desirable complementary benefits such as improving productivity and profitability as well as reducing adverse environmental impact.

Climate Clever Beef: options to improve business performance and reduce greenhouse gas emissions in northern Australia

The Rangeland Journal – Climate Clever Beef special issue examines options for the beef industry in northern Australia to contribute to the reduction in global greenhouse gas (GHG) emissions and to engage in the carbon economy. Relative to its gross value (A$5 billion), the northern beef industry is responsible for a sizable proportion of national reportable GHG emissions (8–10%) through enteric methane, savanna burning, vegetation clearing and land degradation. The industry occupies large areas of land and has the potential to impact the carbon cycle by sequestering carbon or reducing carbon loss. Furthermore, much of the industry is currently not achieving its productivity potential, which suggests that there are opportunities to improve the emissions intensity of beef production. Improving the industry’s GHG emissions performance is important for its environmental reputation and may benefit individual businesses through improved production efficiency and revenue from the carbon economy. The Climate Clever Beef initiative collaborated with beef businesses in six regions across northern Australia to better understand the links between GHG emissions and carbon stocks, land condition, herd productivity and profitability. The current performance of businesses was measured and alternate management options were identified and evaluated. Opportunities to participate in the carbon economy through the Australian Government’s Emissions Reduction Fund (ERF) were also assessed. The initiative achieved significant producer engagement and collaboration resulting in practice change by 78 people from 35 businesses, managing more than 1 272 000 ha and 132 000 cattle. Carbon farming opportunities were identified that could improve both business performance and emissions intensity. However, these opportunities were not without significant risks, trade-offs and limitations particularly in relation to business scale, and uncertainty in carbon price and the response of soil and vegetation carbon sequestration to management. This paper discusses opportunities for reducing emissions, improving emission intensity and carbon sequestration, and outlines the approach taken to achieve beef business engagement and practice change. The paper concludes with some considerations for policy makers.

Use of business analysis in beef businesses to direct management practice change for climate adaptation outcomes

Beef businesses in northern Australia are facing increased pressure to be productive and profitable with challenges such as climate variability and poor financial performance over the past decade. Declining terms of trade, limited recent gains in on-farm productivity, low profit margins under current management systems and current climatic conditions will leave little capacity for businesses to absorb climate change-induced losses. In order to generate a whole-of-business focus towards management change, the Climate Clever Beef project in the Maranoa-Balonne region of Queensland trialled the use of business analysis with beef producers to improve financial literacy, provide a greater understanding of current business performance and initiate changes to current management practices. Demonstration properties were engaged and a systematic approach was used to assess current business performance, evaluate impacts of management changes on the business and to trial practices and promote successful outcomes to the wider industry. Focus was concentrated on improving financial literacy skills, understanding the business’ key performance indicators and modifying practices to improve both business productivity and profitability. To best achieve the desired outcomes, several extension models were employed: the ‘group facilitation/empowerment model’, the ‘individual consultant/mentor model’ and the ‘technology development model’. Providing producers with a whole-of-business approach and using business analysis in conjunction with on-farm trials and various extension methods proved to be a successful way to encourage producers in the region to adopt new practices into their business, in the areas of greatest impact. The areas targeted for development within businesses generally led to improvements in animal performance and grazing land management further improving the prospects for climate resilience.

The effect of earlier mating and improving fertility on greenhouse gas emissions intensity of beef production in northern Australian herds

Approximately 5% of Australian national greenhouse gas (GHG) emissions are derived from the northern beef industry. Improving the reproductive performance of cows has been identified as a key target for increasing profitability, and this higher efficiency is also likely to reduce the GHG emissions intensity of beef production. The effects of strategies to increase the fertility of breeding herds and earlier joining of heifers as yearlings were studied on two properties at Longreach and Boulia in western Queensland. The beef production, GHG emissions, emissions intensity and profitability were investigated and compared with typical management in the two regions. Overall weaning rates achieved on the two properties were 79% and 74% compared with typical herd weaning rates of 58% in both regions. Herds with high reproductive performance had GHG emissions intensities (t CO2-e t–1 liveweight sold) 28% and 22% lower than the typical herds at Longreach and Boulia, with most of the benefit from higher weaning rates. Farm gross margin analysis showed that it was more profitable, by $62 000 at Longreach and $38 000 at Boulia, to utilise higher reproductive performance to increase the amount of liveweight sold with the same number of adult equivalents compared with reducing the number of adult equivalents to maintain the same level of liveweight sold and claiming a carbon credit for lower farm emissions. These gains achieved at two case study properties which had different rainfall, country types, and property sizes suggest similar improvements can be made on-farm across the Mitchell Grass Downs bioregion of northern Australia.

Down scaling to regional assessment of greenhouse gas emissions to enable consistency in accounting for emissions reduction projects and national inventory accounts for northern beef production in Australia

This paper explores the effect of using regional data for livestock attributes on estimation of greenhouse gas (GHG) emissions for the northern beef industry in Australia, compared with using state/territory-wide values, as currently used in Australia’s national GHG inventory report. Regional GHG emissions associated with beef production are reported for 21 defined agricultural statistical regions within state/territory jurisdictions. A management scenario for reduced emissions that could qualify as an Emissions Reduction Fund (ERF) project was used to illustrate the effect of regional level model parameters on estimated abatement levels. Using regional parameters, instead of state level parameters, for liveweight (LW), LW gain and proportion of cows lactating and an expanded number of livestock classes, gives a 5.2% reduction in estimated emissions (range +12% to –34% across regions). Estimated GHG emissions intensity (emissions per kilogram of LW sold) varied across the regions by up to 2.5-fold, ranging from 10.5 kg CO2-e kg–1 LW sold for Darling Downs, Queensland, through to 25.8 kg CO2-e kg–1 LW sold for the Pindan and North Kimberley, Western Australia. This range was driven by differences in production efficiency, reproduction rate, growth rate and survival. This suggests that some regions in northern Australia are likely to have substantial opportunities for GHG abatement and higher livestock income. However, this must be coupled with the availability of management activities that can be implemented to improve production efficiency; wet season phosphorus (P) supplementation being one such practice. An ERF case study comparison showed that P supplementation of a typical-sized herd produced an estimated reduction of 622 t CO2-e year–1, or 7%, compared with a non-P supplemented herd. However, the different model parameters used by the National Inventory Report and ERF project means that there was an anomaly between the herd emissions for project cattle excised from the national accounts (13 479 t CO2-e year–1) and the baseline herd emissions estimated for the ERF project (8 896 t CO2-e year–1) before P supplementation was implemented. Regionalising livestock model parameters in both ERF projects and the national accounts offers the attraction of being able to more easily and accurately reflect emissions savings from this type of emissions reduction project in Australia’s national GHG accounts.

Implications of retaining woody regrowth for carbon sequestration for an extensive grazing beef business: a bio-economic modelling case study

A bio-economic modelling framework (GRASP-ENTERPRISE) was used to assess the implications of retaining woody regrowth for carbon sequestration on a case study beef grazing property in northern Australia. Five carbon farming scenarios, ranging from 0% to 100% of the property regrowth retained for carbon sequestration, were simulated over a 20-year period (1993–2012). Dedicating regrowth on the property for carbon sequestration reduced pasture (up to 40%) and herd productivity (up to 20%), and resulted in financial losses (up to 24% reduction in total gross margin). A net carbon income (income after grazing management expenses are removed) of $2–4 per t CO2-e was required to offset economic losses of retaining regrowth on a moderately productive (~8 ha adult equivalent–1) property where income was from the sale of weaners. A higher opportunity cost ($ t–1 CO2-e) of retaining woody regrowth is likely for feeder steer or finishing operations, with improved cattle prices, and where the substantial transaction and reporting costs are included. Although uncertainty remains around the price received for carbon farming activities, this study demonstrated that a conservatively stocked breeding operation can achieve positive production, environmental and economic outcomes, including net carbon stock. This study was based on a beef enterprise in central Queensland’s grazing lands, however, the approach and learnings are expected to be applicable across northern Australia where regrowth is present.

Preventing weed spread: a survey of lifestyle and commercial landholders about Nassella trichotoma in the Northern Tablelands of New South Wales, Australia

Nassella trichotoma (Nees) Hack. ex Arechav. (common name, serrated tussock) occupies large areas of south-eastern Australia and has considerable scope for expansion in the Northern Tablelands of New South Wales. This highly invasive grass reduces pasture productivity and has the potential to severely affect the region’s economy by decreasing the livestock carrying capacity of grazing land. Other potential consequences of this invasion include increased fuel loads and displacement of native plants, thereby threatening biodiversity. Rural property owners in the Northern Tablelands were sent a mail questionnaire that examined use of measures to prevent new outbreaks of the weed. The questionnaire was sent to professional farmers as well as lifestyle farmers (owners of rural residential blocks and hobby farms) and 271 responses were obtained (a response rate of 18%). Key findings were respondents’ limited capacity to detect N. trichotoma, and low adoption of precautions to control seed spread by livestock, vehicles and machinery. This was particularly the case among lifestyle farmers. There have been considerable recent changes to biosecurity governance arrangements in New South Wales, and now is an ideal time for regulators and information providers to consider how to foster regional communities’ engagement in biosecurity, including the adoption of measures that have the capacity to curtail the spread of N. trichotoma.

Comparing fixed and flexible stocking as adaptations to inter-annual rainfall variability in the extensive beef industry of northern Australia

Many beef producers within the extensive cattle industry of northern Australia attempt to maintain a constant herd size from year-to-year (fixed stocking), whereas others adjust stock numbers to varying degrees annually in response to changes in forage supply. The effects of these strategies on pasture condition and cattle productivity cannot easily be assessed by grazing trials. Simulation studies, which include feedbacks of changes to pasture condition on cattle liveweight gain, can extend the results of grazing trials both spatially and temporally. They can compare a large number of strategies, over long periods of time, for a range of climate periods, at locations which differ markedly in climate. This simulation study compared the pasture condition and cattle productivity achieved by fixed stocking at the long-term carrying capacity with that of 55 flexible stocking strategies at 28 locations across Queensland and the Northern Territory. Flexible stocking strategies differed markedly in the degree they increased or decreased cattle stocking rates after good and poor pasture growing seasons, respectively. The 28 locations covered the full range in average annual rainfall and inter-annual rainfall variability experienced across northern Australia. Constrained flexibility, which limited increases in stocking rates after good growing seasons to 10% but decreased them by up to 20% after poor growing seasons, provides sustainable productivity gains for cattle producers in northern Australia. This strategy can improve pasture condition and increase cattle productivity relative to fixed stocking at the long-term carrying capacity, and its capacity to do this was greatest in the semiarid rangeland regions that contain the majority of beef cattle in northern Australia. More flexible stocking strategies, which also increased stocking rates after good growing seasons by only half as much as they decreased them after poor growing seasons, were equally sustainable and more productive than constrained flexibility, but are often impractical at property and industry scales. Strategies with the highest limits (e.g. 70%) for both annual increases and decreases in stocking rates could achieve higher cattle productivity, but this was at the expense of pasture condition and was not sustainable. Constrained flexible stocking, with a 10% limit for increases and a 20% limit for decreases in stocking rates annually, is a risk-averse adaptation to high and unpredictable rainfall variability for the extensive beef industry of northern Australia. © Australian Rangeland Society 2016.

Bioeconomic modelling of woody regrowth carbon offset options in productive grazing systems

Agricultural land has been identified as a potential source of greenhouse gas emissions offsets through biosequestration in vegetation and soil. In the extensive grazing land of Australia, landholders may participate in the Australian Government’s Emissions Reduction Fund and create offsets by reducing woody vegetation clearing and allowing native woody plant regrowth to grow. This study used bioeconomic modelling to evaluate the trade-offs between an existing central Queensland grazing operation, which has been using repeated tree clearing to maintain pasture growth, and an alternative carbon and grazing enterprise in which tree clearing is reduced and the additional carbon sequestered in trees is sold. The results showed that ceasing clearing in favour of producing offsets produces a higher net present value over 20 years than the existing cattle enterprise at carbon prices, which are close to current (2015) market levels (~$13 t–1 CO2-e). However, by modifying key variables, relative profitability did change. Sensitivity analysis evaluated key variables, which determine the relative profitability of carbon and cattle. In order of importance these were: the carbon price, the gross margin of cattle production, the severity of the tree–grass relationship, the area of regrowth retained, the age of regrowth at the start of the project, and to a lesser extent the cost of carbon project administration, compliance and monitoring. Based on the analysis, retaining regrowth to generate carbon income may be worthwhile for cattle producers in Australia, but careful consideration needs to be given to the opportunity cost of reduced cattle income.

Pasture production and composition response after killing Eucalypt trees with herbicides in central Queensland

Clearing woodlands is practised world-wide to increase crop and livestock production, but can result in unintended consequences including woody regrowth and land degradation. The pasture response of 2 eucalypt woodlands in the central Queensland rangelands to killing trees with herbicides, in the presence or absence of grazing and regular spring burning, was recorded over 7 or 8 years to determine the long-term sustainability of these common practices. Herbage mass and species composition plus tree dynamics were monitored in 2 replicated experiments at each site. For 8 years following herbicide application, killing Eucalyptus populnea F. Muell. (poplar box) trees resulted in a doubling of native pasture herbage mass from that of the pre-existing woodland, with a tree basal area of 8.7 m2 ha-1. Conversely, over 7 years with a similar range of seasons, killing E. melanophloia F. Muell. (silver-leaved ironbark) trees of a similar tree basal area had little impact on herbage mass grown or on pasture composition for the first 4 years before production then increased. Few consistent changes in pasture composition were recorded after killing the trees, although there was an increase in the desirable grasses Dichanthium sericeum (R. Br.) A. Camus (Queensland bluegrass) and Themeda triandra Forssk. (kangaroo grass) when grazed conservatively. Excluding grazing allowed more palatable species of the major grasses to enhance their prominence, but seasonal conditions still had a major influence on their production in particular years. Pasture crown basal area was significantly higher where trees had been killed, especially in the poplar box woodland. Removing tree competition did not have a major effect on pasture composition that was independent of other management impositions or seasons, and it did not result in a rapid increase in herbage mass in both eucalypt communities. The slow pasture response to tree removal at one site indicates that regional models and economic projections relating to tree clearing require community-specific inputs.