Potential profit gains from improving pasture productivity on New Zealand South Island high-country farms

Abstract

Soil acidity combined with low levels of key nutrients on New Zealand hill-country farms are limiting factors for legume establishment/growth. However, legumes are a critical component of these farms as they provide nitrogen and high-quality feed. A farm-systems model was developed to estimate the impact of targeted fertiliser and lime application, combined with sowing clover, on whole-farm productivity and profitability. A base model was developed that incorporated 17 years’ worth of Beef + Lamb NZ survey data for Class 1: South Island Farms. This base model was then used investigate two lime-application/oversowing models where part of the modelled high-country farm was targeted for improvement: (1) Conservative, i.e. 0.6% farm area; and (2)  Aggressive, i.e. 2.8% farm area. Three scenarios to utilise the additional pasture grown were then investigated for each model by: (a) increasing ewe numbers; (b) increasing ewe performance (lambing percentage); and (c) increasing liveweight gain of stock. Scenario 2a, generated the highest profitability level (Earnings before Interest Tax and Rent, EBITR $58,870) above the base model but became less financially attractive when the two years required to build the maternal ewe flock were factored in. Scenarios 2c and 1b generated increases in profitability (EBITR) between $33,310 and $41,290 above the base model. Variation in product prices, production levels and time to develop the final farm-management system would also influence the productivity and profitability of the scenarios. Environmental aspects, infrastructure and staff availability would affect the suitability of the development for individual farming businesses.