Occasional Paper No. 73 - - - - - -- - - - - -

b m n &

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(e) Bureau of A g r i c u l t u r a l ~ c o n o m i c s , Canberra

Occasional Paper No. 73

Some Potential Economic Effects of Technology and Productivity Change in Australia's Beef Cattle and Sheep Industries

Project 3622

G.Love. R. Blanks, C. Buik and K.Williams

A u s t r a l i a n Government. Pub l i sh ing S e r v i c e Canberra 1982

FOREWORD

,The i d e n t i f i c a t i o n o f b e n e f i t s l i k e l y to a c c r u e £ran t h e development and adap t ion o f new r u r a l technology is e s s e n t i a l f o r t h e e f f i c i e n t a l l o c a t i o n of r u r a l r e s e a r c h funds.

S ince 1974, t h e Bureau o f A g r i c u l t u r a l Economics h a s developed a s e r i e s o f r e g i o n a l p r o g r a m i n g models of A u s t r a l i a n a g r i c u l t u r e . I n t h i s pape r , the l a t e s t o f t h e s e models, a 13-region p r o g r a m i n g model Of t h e A u s t r a l i a n g r a z i n g i n d u s t r y , is used to q u a n t i f y t h e p o t e n t i a l b e n e f i t s f r a n p r o d u c t i v i t y change i n t h i s i n d u s t r y . The r e s u l t s i n d i c a t e a r e a s of i n t e r e s t £ ran t h e p o i n t o f view o f r u r a l r e s e a ~ c h .

The p r o g r a m i n g model p r o v i d e s a framework f o r a n a l y s i s of i n d u s t r y supply response which t a k e s account o f t h e j o i n t p roduc t ion of -1, meat and cereals by t h e A u s t r a l i a n g r a z i n g i n d u s t r y . The model was developed i n t h e Rura l P roduc t ion Economics Branch o f t h e Bureau under the o v e r a l l guidance o f Dr Onko Kingma.

ANDY STOECKEL D i r e c t o r

Bureau o f A g r i c u l t u r a l Economics Canberra A.C.T.

November 1982

CONTENTS

Foreword

Summary

1. Introduct ion

Soope of t he paper Implications f o r r u r a l research Outl ine of t he paper

2. The Regional Programming Model

Development S t ruc ture Simulating technology and product iv i ty change

3. Model Resul ts

Labour Shearing and p a r a s i t e con t ro l Farm machinery and s t r u c t u r e s F e r t i l i s e r Feed production Wool and l ives tock s e l l i n g Wool and l ives tock t ranspor t Feed t o beef conversion r a t i o Feed to sheep meat and wool conversion r a t i o Lambing r a t e s Branding r a t e s Sheep and c a t t l e mor t a l i t y r a t e s

4. Discussion of Resul t s

Appendix A: Mathematical Formulation of t h e Regional Programming Model

References

Figure

Pi gure

1 Schematic represen ta t ion o f t h e RPM grazing l i ve s tock 'camponents

1 Austral ia : boundaries used i n r eg iona l a n a l y s i s of research bene f i t s

Page

(iii)

2 ~ u s t r a l i a n grazing indus t ry survey zones

Tables

Tab1 e

1 Product p r i c e s used i n the derived ou tpu t f r m the base Solution

2 Percentage change i n base l e v e l of t echn ica l c o e f f i c i e n t required f o r an increase of 1 per c e n t i n grazing industry ne t income

3 Labour c o s t s as a percentage of t o t a l farm c o s t s on Austral ian grazing industry proper t ies : by en t e rp r i s e type and zone and for Austral ia: 1976-77: average per property

4 Change i n ind iv idua l en t e rp r i s e g ros s value of output and t o t a l grazing industry ne t value of output i n response t o 5 10 per c e n t changes i n base l e v e l of labour requirements concurrent ly across a l l re levant zones

5 Change i n individual en t e rp r i s e gross value of output and t o t a l grazing industry ne t value of output i n response t o + 10 per c e n t changes i n base l e v e l of shearing and crutching c o s t s requirements concurrent ly ac ros s a l l re levant zones

6 Change i n ind iv idua l en t e rp r i s e g r o s s v a l u e of output and t o t a l grazing industry ne t value of output i n response t o + 10 per c e n t changes i n base l e v e l of c a p i t a l requirements onc currently across a l l re levant zones

7 Change i n individual en t e rp r i s e g ros s value of output and total grazing industry ne t value of ou tput i n response t o

+_ 10 per c e n t changes i n base l e v e l of f e r t i l i s e r requirements concurrently ac ros s a l l r e l evan t zones

8 Change i n individual en t e rp r i s e gross value of output and t o t a l grazing industry ne t value of ou tput i n response t o +_ 10 per c e n t changes i n base l e v e l s of feed supply concurrent ly across a l l relevant. zones

9 Change i n individual en t e rp r i s e g ros s value of output and t o t a l grazing industry ne t value of ou tput i n response to 2 10 per cen t changes i n base l e v e l of pas ture carry-over concurrent ly across a l l re levant zones

10 Change i n individual en t e rp r i s e g ros s value of output and t o t a l grazing industry ne t value of ou tput i n response t o + 10 per c e n t changes i n base l e v e l s of wool s e l l i n g c o s t s concurrent ly across a l l re levant zones

11 Change in ind iv idua l en t e rp r i s e g ros s value of output and total grazing industry ne t value o f ou tput i n response t o

10 per cen t changes i n base l e v e l s of wool and l ivestock t r anspo r t c o s t s concurrent ly ac ros s a l l re levant zones

Page

8

Page

12 Change i n i nd iv idua l en t e rp r i s e g ros s value Of Output and t o t a l grazing indus t ry n e t value of output i n r e s F n s e t o + 10 per c e n t changes i n base l e v e l s of feed t o beef conversion concurrent ly across a l l zones

13 Change i n ind iv idua l en t e rp r i s e g ros s value of output and t o t a l grazing indus t ry n e t value o f output i n response t o + 10 per cen t changes in base l e v e l of feed intake per beef animal concurrent ly across a l l r e l evan t zones

14 Change i n ind iv idua l en t e rp r i s e g ros s value of output and t o t a l grazing indus t ry ne t value of output i n response t o + 10 per cen t changes i n base l e v e l of feed t o sheep meat conversion concurrent ly across a l l r e l evan t zones

15 Change i n ind iv idua l en t e rp r i s e g ros s value of output and t o t a l grazing indus t ry n e t value o f output i n response t o +_ 10 per cen t changes i n base l e v e l of feed t o wool conversion concurrent ly across a l l r e l evan t zones

16 Change i n ind iv idua l en t e rp r i s e g ros s value of output and total grazing industry n e t value of output i n response t o + 10 per cen t changes i n base l e v e l of feed intake per sheep ooncurrently ac ros s a l l re levant zones

17 Lambing and branding r a t e s on Aus t ra l ian grazing industry propert ies: by e n t e r p r i s e type, zone and Aus t ra l ia : 1976-66 average per property

18 Change i n i nd iv idua l en t e rp r i s e g ros s value of output and t o t a l grazing industry ne t value of output i n response t o + 10 per cen t changes i n base l e v e l of lamb marking r a t e concurrently ac ros s a l l re levant zones

19 Change i n ind iv idua l en t e rp r i s e g ros s value of output and t o t a l grazing indus t ry n e t value of output i n response t o +_ 10 per cen t changes i n base l e v e l s of c a l f branding r a t e concurrent ly ac ros s a l l regions.

SOME POTENTIAL ECONOMIC EFFECTS OF TECHNOLOGY AND PRODUCTIVITY CHANGE I N AUSTRALIA'S BEEF CATTLE AND SHEEP INDUSTRIES

. Some $ 2 5 0 1 ~ - $ 3 5 0 ~ ~ a year i s s p e n t on research i n the a g r i c u l t u r a l and p a s t o r a l i n d u s t r i e s . C i ~ n the l a r g e sums s p e n t on r e s e a r c h , and the i n c r e a s e d a c t i v i t y by the A u s t r a l i a n A g r i c u l t u r a l Counc i l i n the d e t e a n i n a t i o n o f p r i o r i t i e s f o r r u r a l r e s e a r c h , it i s e x p e c t e d t h a t i n c r e a s e d emphas i s w i l l be g i v e n to the d i r e c t i o n and a l l o c a t i o n o f research funds i n the f u t u r e .

. An e f f i c i e n t a l l o c a t i o n o f r e s e a r c h f u n d s i s needed f o r i t s own s a k e as Ell a s f o r sa f eguard ing and i n c r e a s i n g the c o m p e t i t i v e n e s s o f A u s t r a l i a ' s i n d u s t r i e s . Research f u n d s e n a b l e the deve lopment and a p p l i c a t i o n o f new t e c h n o l o g i e s and t e c h n i q u e s , t h rough which p r o d u c t i v i t y i n c r e a s e s a r e p o s s i b l e .

. The m a j o r t e c h n o l o g i c a l deve lopment a f f e c t i n g A u s t r a l i a n a g r i c u l t u r a l o u t p u t in the post-war per iod was the deve lopment o f improved p a s t u r e s . W i t h the end ing o f t h e p a s t u r e r e v o l u t i o n , there may n o t be s u c h an imnense l y p r o f i t a b l e and o b v i o u s l ine o f research i n the f u t u r e . I n c r e a s i n g l y , r e s e a r c h management w i l l need a n a n a l y t i c a l framework t o examine what a r e more c w n p l i c a t e d research choices. T h i s a r t i c l e p r o v i d e s one s u c h framework t o a s s i s t i n the e f f i c i e n t a l l o c a t i o n o f f unds f o r r e s e a r c h .

. The o b j e c t i v e i n the paper i s t o i d e n t i f y the a r e a s i n p r o d u c t i o n and m a r k e t i n g i n A u s t r a l i a ' s b e e f and s h e e p i n d u s t r i e s i n which economic and t e c h n i c a l r e s e a r c h i s l i k e l y t o h a v e h i g h f u t u r e p a y - o f f s i n t e r m s o f i n c r e a s e s i n pr imary producers ' incomes .

. The approach used was b a s e d on an a p p l d c a t i o n o f the Bureau ' s Regional Programming Model , and i n w l v e d the i d e n t i f i c a t i o n and r a n k i n g o f s e l e c t e d t e c h n o l o g i c a l and management improvements i n t e r m s o f their c o n t r i b u t i o n t o g r a z i n g i n d u s t r y net income. A l t h o u g h the r e s u l t s a r e p r e l i m i n a r y and d o n o t i n c l u d e the r e s e a r c h c o s t s o f d e v e l o p i n g and adop t ing p a r t i c u l a r i n n o v a t i o n s , t h e y serve t o p o i n t t o a r e a s where economic and t e c h n i c a l r e s e a r c h c o u l d be p r o f i t a b l y d i r e c t e d .

. On a n a t i o n a l b a s i s , the r e s u l t s o b t a i n e d from the a n a l y s i s i n d i c a t e d t h a t l o per cent increases i n p r o d u c t i v i t y i n the f o l l o w i n g a r e a s were found to h a v e , i n o r d e r , the mos t impac t on the incomes o f sheep and c a t t l e producers .

Feed supp ly : net g r a z i n g i n d u s t r y income i n c r e a s e d b y 16.8 p e r cent. I t may ke p o s s i b l e t o r e a l i s e s u c h p o t e n t i a l i n c r e a s e s in p r o d u c t i v i t y i n the s o u t h e r n a r e a s b y c o n t r o l o f p a s t u r e p e s t s , and i n the northern a r e a s b y a d o p t i o n o f t r o p i c a l l egumes and f o d d e r c r o p s .

Labour r e q u i r m e n t s : net g r a z i n g i n d u s t r y i ncome was shown t o have the p o t e n t i a l t o i n c r e a s e b y 11.5 p e r c e n t . In the s h e e p i n d u s t r y , l a b o u r

p r o d u c t i v i t y c o u l d be i n c r e a s e d t h rough management methods which reduced doub le -hand l ing o f stock, improvements i n the war1 h a r v e s t i n g p r o c e s s , the b r e e d i n g o f sheep w i t h e a s y c a r e c h a r a c t e r i s t i c s , and the control o f s h e e p b l o w f l y . I n the c a t t l e i n d u s t r y , l a b o u r p r o d u c t i v i t y c o u l d b e n e f i t from t i c k - r e s i s t a n t stock, new t y p e s and methods o f f e n c i n g , and new s t o c k - h a n d l i n g t e c h n i q u e s .

Feed c o n v e r s i o n e f f i c i e n c y : net g r a z i n g i n d u s t r y income i n c r e a s e d b y 8.7 p e r c e n t . The means o f a c h i e v i n g s u c h p r o d u c t i v i t y p o t e n t i a l may be th rough g e n e t i c selection or d i e t s u p p l e m e n t a t i o n .

R e p r o d u c t i v e performance: n e t g r a z i n g i n d u s t r y i n c a n e i n c r e a s e d b y abou t 4.5 per c e n t . The means o f a c h i e v i n g this p o t e n t i a l may be through m m e widespread adop t ion o f c o n t r o l l e d m a t i n g and weaning, s t r a t e g i c p r o t e i n and phosphorus s u p p l e m e n t a t i o n , a r t i f i c i a l i n s e m i n a t i o n , and improvements i n animal h e a l t h t o r e d u c e m o r t a l i t y .

Carry-over p a s t u r e : net g r a z i n g i n d u s t r y income i n c r e a s e d b y 3.6 per cent.

F e r t i l i s e r u s e e f f i c i e n c y : net g r a z i n g i n d u s t r y income i n c r e a s e d b y 3.4 p e r cent.

. O n a z o n a l b a s i s , it appears t h a t , a s e x p e c t e d , t h e impac t of t e c h n o l o g y and t e c h n i q u e s would be g r e a t e s t i n r e l a t i o n t o t h o s e f a c t o r s mos t l i m i t i n g i n each zone . S p e c i f i c a l l y , these a r e feed s u p p l y i n the P a s t o r a l Z o m and l a b o u r p r o d u c t i v i t y i n the Wheat-Sheep and High R a i n f a l l Zones.

. A l s o r ev i ewed i n the paper are a number o f t e c h n i q u e s c u r r e n t l y under c o n s i d e r a t i o n f o r f u t u r e r e s e a r c h i n t h e two i n d u s t r i e s . T h e s e t e c h n i q u e s range from l a s e r - a c t i v a t e d s h e a r i n g h a n d p i e c e s to the humble dung beetle. The paper t h u s p r o v i d e s a s u m a r y o f t e c h n i q u e s t h a t m i g h t be e x p e c t e d t o produce p r o d u c t i v i t y g a i n s i n the s i x h i g h pay-o f f a r e a s l i s t e d above .

. The genera l c o n c l u s i o n which emerges from the paper i s t h a t c e r t a i n a r e a s o f r u r a l r e s e a r c h have much g r e a t e r p o t e n t i a l r e t u r n s t h a n o t h e r s . T h i s i n f o r m a t i o n can be used i n c o n j u n c t i o n w i t h cost i n f o r m a t i o n to d e t e r m i n e a r e a s w i t h the g r e a t e s t p o t e n t i a l net p a y - o f f . I t i s hoped t h a t , i n this way, the r e s u l t s o f this a n a l y s i s w i l l add t o t h e i n f o r m a t i o n a v a i l a b l e to t h o s e r e s p o n s i b l e for the a l l o c a t i o n o f f unds f o r r u r a l r e s e a r c h .

1. Introduction

1.1 Scow of the Paper

Aust ra l ia ' s beef and sheep indus t r i e s a r e important ertport indus t r ies whose rrsopetitive pos i t ions must be maintained or improved i f ~ u s t r a l i a ' s p s i t i o n i n m r l d trade in these indus t r i e s is t o be maintained or expanded. Essent ia l to Aust ra l ia ' s canpeti t iveness a re productivi ty increases. Such increases a re poss ib le only through the development and adoption Of new technologies and techniques. The benef i t s £ran the development and adoption of new r u r a l technology are potent ia l ly la rge (Miller 1979).

In t h i s paper, the po ten t i a l pay-offs from selected productivi ty changes in the beef c a t t l e and sheep indus t r ies a r e estimated. The Bureau's Regional ( l i nea r ) Programing Model (RPM) is used t o simulate the a l loca t ion of resources within these indus t r ies , generating information on the optimal mix of l ives tock and cropping a c t i v i t i e s , the optimal use of variable inputs and the optimal pat tern of land use over a specif ied production period. The model, therefore, provides a framework for the simulation of the type of technological changes in agr icu l ture described in the Report of the Committee of Inquiry in to Technological Change i n Austral ia (1980).

The RPM is based broadly on the Bureau's three t r a d i t i o n a l production zones (High Rainfal l . Wheat-Sheep and Pas tora l ) . To permit a more de ta i led spec i f ica t ion of various c l ima t i c and enterpr i se types, fur ther subzones or regions are defined. Major sheep, beef and cropping a c t i v i t i e s within these are modelled. Four leve ls of input use a r e spec i f ied t o permit resource subs t i t u t ion between a c t i v i t i e s of d i f f e r i n g capital-labour in tens i ty . Linkages to the overa l l economy a r e through the p r i ces of c a p i t a l , labour and purchased inputs, and through various i n s t i t u t i o n a l cons t ra in ts .

Productivi ty changes in the a reas of labour use and shearing, f e r t i l i s e r , t ransport , feed supply and demand, and l ivestock performance are simulated. The gross benef i t of these is quantif ied through changes in the model's estimate of grazing industry net income.

1.2 I m ~ l i c a t i o n s for Rural Research

Research pro jec ts a re car r ied ou t i n an environment of uncertainty. Therefore, any ex ante evaluat ion of the benef i t of undertaking a research pro jec t w i l l require an evaluat ion both of the future stream of net income t h a t may r e s u l t and of the probabi l i ty of t ha t pro jec t being successful.

A s est imates of the benefi ts from selected productivi ty increases, the r e s u l t s presented in t h i s paper represent a f i r s t s t ep in the process of research pro jec t evaluation. Subsequent s teps , beyond the scope of t h i s paper but mentioned for completeness, a re a s follows.

To begin, the expected cos t s of implementing the new technology a t the farm l eve l and the cos ts Of the research program i t s e l f must be c a l ~ l a t e d and subtracted from gross benef i t s . This must be done not

only for the f i r s t year of conrmercial appl ica t ion , but for subsequent years a s well. The stream of net b e n e f i t s is then converted t o a net present value by d iscount ing . ( l ) F ina l ly , an assessment must be made of t he chance of the pro jec t being successful .

To obta in the maximum expected re turn from investment i n r u r a l research, research funds should be a l loca t ed f i r s t t o those p ro j ec t s with the highest expected r a t e s of re turn , then successively t o those of lower expected r a t e s of return u n t i l ava i lab le funds a r e f u l l y al located. The expected r a t e of return on marginal un i t s of investment is a l s o important: sane p ro j ec t s may warrant addi t ional investment i f t h e i r marginal expected r a t e of re turn is high in comparison with a l t e rna t ives . Also, i n an uncertain environment, the expected r a t e of r e tu rn from marginal u n i t s of investment may take the form of an increase e i t h e r i n net income or i n the p robab i l i t y t ha t t ha t inccme w i l l be rea l i sed .

T w fur ther points should be mentioned. F i r s t l y , on an individual farm bas i s its makes l i t t l e d i f fe rence whether productivi ty gain is sought through increased output per u n i t of input, or decreased input per u n i t of output: and, in t he pas t , r u r a l research has tended t o concentrate on ways of increasing output from a given l eve l of input. On an industry basis , however, the t o t a l volume of output may have implicat ions for both product and input pr ices . For instance, the CSIRO W w l Research Committee has recommended t h a t c lo se a t t en t ion be given t o s t r a t e g i e s which reduce input for a f ixed l e v e l of output (CSIRO W w l Research Cormnittee 1977).

Secondly, not a l l po ten t i a l product iv i ty gains a re mutually compatible. For instance, a drenching program, while increasing product iv i ty i n the shor t run, may hinder the na tura l se lec t ion of pa ra s i t e - r e s i s t an t animals. The optimal choice between se lec t ion and some a l t e r n a t i v e means of product iv i ty improvement can be made only in t he l i g h t of the genetic variance of the desired cha rac t e r i s t i c compared with the e f f i cacy and cos t of a l t e r n a t i v e management procedures.

1.3 Outline of the Paper

In the following sec t ion , the development and s t ruc tu re of the Bureau's regional programming model is outl ined. Use of the model t o simulate technology and productivi ty change in the grazing industry is then described.

In sect ion 3, key r e s u l t s from the analys is are discussed, together with cur rent research and innovation in the industry. Labour use, shearing, farm machinery and s t r u c t u r e s , f e r t i l i s e r , feed production, s e l l i n g and transport cos t s , conversion r a t i o s , lambing and branding r a t e s , and mor ta l i ty r a t e s a r e some of the areas examined. In sect ion 4 , some implicat ions of the paper 's r e s u l t s a re discussed.

(1) isc counting r e f l e c t s soc i e ty ' s preference for cur rent rather than fu tu re consumption.

2. The Regional Programinq W e 1 (RPM)

Regional models w e e f i r s t used in the Bureau in the evaluation of input subsidies i n the broadacre indus t r ies . Kingma, in BAE (1975a). used a recursive LP t o generate and analyse cash flows over time for the sheep, beef and cropping indus t r ies . The model was l a t e r expanded t o represent f i ve major geographic regions in Austral ia (Easter and Kingma 1976).

Many fea tures of t h i s model made it pa r t i cu l a r ly usefu l for the ana lys is of product iv i ty change. The decentral ised s t ruc tu re permitted regional d i f fe rences in product iv i ty t o be ref lec ted in the ove ra l l nat ional solut ion. The model could be used t o pro jec t forward for a s ing le production period of 1-5 years; t h i s allowed quant i f ica t ion Of 'second-round' e f f ec t s . Bond (1977). Easter (1977) and Kingma (1977) a l l used the five-region m c d e l W quant i fy the economic e f f e c t s of productivi ty change.

Later, the number of regions in the model was increased t o 13 and the degree of d e t a i l fo r the a c t i v i t i e s was a l s o increased. The 13-region model (RPM) has been described by Longmire e t a l . (1979). That paper a l s o gives examples of val idat ion.

2.2 Structure

A s a general poin t , a l l mathematical models represent a s impl i f ica t ion of r ea l i t y . Provided a model's s t ruc tu re is conceptually cor rec t , i nc reases i n d e t a i l may r e s u l t i n closer approximations t o r ea l i t y . However, t h i s must be balanced against increased research and computing costs. It is considered t h a t a model of 13 regions represents a reasonable compromise between these competing i n t e r e s t s .

Similarly, the model-builder w i l l wish t o ensure a reasonable balance between the l e v e l of abs t rac t ion oE each component of the model and t h a t of the ove ra l l mcdel i t s e l f . For instance, a very de ta i led submodel may add l i t t l e to the accuracy of t he r e s u l t s and a t the same time increase computing costs ove ra l l .

The RPM maximises an objec t ive function of net income t o the na t ional grazing industry, subjec t to a s e r i e s of resource and behavioural cons t ra in ts (see Appendix). Those cons t r a in t s change the (otherwise normative) LP solut ion t o allow predic t ion of ac tua l (pos i t ive) short-run behaviour of farm firms (Kingma, tongmire and Stoeckel 1980).

Activi ty c o e f f i c i e n t values were based on data from severa l sources, including S t a t e departments responsible for agr icu l ture , CSIRO, and the BAE Australian Agr icul tura l and Grazing Indus t r ies Survey (AAGIS). Feed supply was expressed in livestock-months (LSM) . Transfer of surplus feed between calendar qua r t e r s was permit ted, with amounts t ransfer red based on assumed r a t e s of pas ture de ter iora t ion . Feed quant i ty and q u a l i t y d i f ferences were a l s o incorporated.

Four l e v e l s of input use were spec i f ied fo r a l l a c t i v i t i e s . This gave expression, w i th in the overa l l l e v e l of abs t rac t ion of the model, to the concept of 'extensif ica t ion ' ( i . e . reduced l ivestock carrying capaci ty per u n i t of output ) . and permitted resource subs t i t u t ion between a c t i v i t i e s of d i f f e r ing capital / labour in t ens i ty . Linkages t o the ove ra l l econany were through the p r i ces of c a p i t a l , labour and purchased inputs , and through various i n s t i t u t i o n a l cons t ra in ts . These linkages permitted changes in the resource base r e l a t i v e t o the ove ra l l economy.

por any run of the model, p r i ce s and d i r e c t cos t s a r e exogenous o r held constant, which means tha t i n f l a t i o n plays no pa r t i n determining l e v e l s of investment o r flows of c a p i t a l . Pr ices and cos t s e f f ec t ive ly a r e modelled i n r e a l terms. Despite t h i s , the question of what r a t e of i n t e r e s t t o use and whether c a p i t a l ga ins as re f lec ted in commercial r a t e s a r e t o be included is not c l e a r cut .

In the present model formulation, i n t e r e s t r a t e s r e f l e c t commercial r a t e s of i n t e r e s t . To the extent t h a t these represent a c a p i t a l gains component i n ag r i cu l tu re (due t o i n f l a t i o n ) , they may possibly overs ta te the p r i ce of cap i t a l . However, c a p i t a l gains, though relevant to land development, a r e not .relevant t o purchases of p l an t and l ivestock. The i ssue thus beManes one of including d i f f e r e n t i a l r a t e s of i n t e r e s t , with a t tendant (trade-off) problems of model s i z e a s the types of c a p i t a l included in the model increase. This problem is receiving fur ther a t t e n t i o n i n cur rent Bureau studies.

2.3 Simulating T e c h n o l w and Producti v i t q Change

Simulation of technology and product iv i ty change follcwed the method of Bond (1977), Easter (1977). Kingma (1977). A base, or control , so lu t ion was generated. Then, with p r i c e s $nd c o s t s held constant, input-output coe f f i c i en t s for individual a c t i v i t i e s were changed concurrently across a l l regions.(2) The new solu t ion was then compared with the o r i g i n a l ' solut ion, the d i f ference between the tm, being expressed as a percentage change from the base solut ion.

For t h i s ana lys is , input p r i ce s were based on BAE survey data for the grazing industry for t he Year 1976-77. Output p r i ce s were based on an est imate of medium-term trend p r i ces derived from BAE (1979) (see Table 1). For consistency. a l l c o e f f i c i e n t s were adjusted by 10 per cent £ran the i r base value. To e s t ab l i sh the nature of the response surface, both pos i t ive and negative productivi ty changes were simulated.(3) The percentage change i n each parameter necessary to change grazing industry n e t income by 1 per cent was then ca lcula ted (see Table 2 ) . A schematic representat ion of t h i s is presented i n Figure 1.

To i l l u s t r a t e the d i s t r i b u t i o n a l e f f e c t s of spec i f i c productivi ty changes. reg ional r e s u l t s were aggregated i n t o four zones (High Rainfal l , Wheat-Sheep, Northern Pas tora l and Southern Pas tora l ) . These correspond

(2) Model coe f f i c i en t s r e f l e c t r a t e s a t which inputs a r e transformed in to intermediate and f i n a l outputs.

(3) This does not imply tha t a 10 per c e n t change would be f eas ib l e for a l l regions. 10 per cent was chosen f o r the purposes of experimental design.

F i g u r e 1: SCHEMATIC REPRESENTATION OF THE RPMGRAZING LIVESTOCK COMPONENTS

e a c h q u a r t e r

(1) Feed s u p p l y : t p e r q u a r t e r p e r ha g r a z e d ( 2 ) Feed c a r r y o v e r : t c a r r i e d to n e x t q u a r t e r (3) R e p r o d u c t i o n r a t e : a n i m a l s marked p e r a n i m a l s mated ( 4 ) Replacement r a t e : f e m a l e s r e t a i n e d P e r t o t a l f e m a l e s ( 5 ) M o r t a l i t y r a t e : d e a t h s per a n i m a l s r u n ( 6 ) c o n v e r s i o n r a t e ( i ) : f e e d i n t a k e P e r a n i m a l (.,) conversion rate (ii) : w o o l p e r h e a d ; mea t p e r h e a d

( 8 ) Labour: nan-days ( 9 ) S h e a r i n g : $ p e r a n i m a l (101, C a p i t a l : ~ e q u i r g r n e n t p e r a n i m a l (11) F e r t i l i s e r s : , t y h a . ( 1 2 ) ~ r a n s p o i t : S .per ' an im.31 s o l d ( 1 3 ) S e l l i n g : $ p e r a n i m a l s o l d ( 1 4 ) A g r i c u l t u r a l c h e m i c a l s : $ p e r a n i m a l

c l o s e l y with the High Ra in f a l l , Wheat-Sheep and P a s t o r a l Zones used i n t he Bureau's AAGIS (see Maps 1 and 2) . Changes i n t he g ro s s value o f ou tpu t fo r the ~201, sheep meat, beef and cropping a c t i v i t i e s i n these zones a r e presented i n var ious t ab l e s throughout s ec t i on 3. A s impl i fy ing assumption behind these t a b l e s is t h a t a pos s ib l e change i n a p a r t i c u l a r t echnica l c o e f f i c i e n t of production takes p lace uniformly across a l l regions. This is obviously not always the case.

Table 1: PRODUCT PRICES USED IN AND DERIVED OUTPUT FRW4 THE BASE SOLUTION

Pmduc t P r i c e Production

$/kg k t

Wml 1.83 583 - Sheep meat

Lean lamb 0.80 62 Prime lamb 0.86 354 Mutton 0.42 190

$/head Live sheep 16.50 - 110 (a)

Tota l sheep meat - - 716

$/kg Beef and vea l Manufacturing beef 0.57 Table beef 0.84

Tot a 1 - 1140

S / t M t Ce rea l s ( fo r g r a in ) Wheat 91.00 13.2 Barley 93.31 3.2 Oats 79.56 1.2 Sorghum 85.07 0.5 -

Tota l 18.1

( a ) 4.9 m i l l i on l i v e sheep expressed i n c a r ca s s w i g h t using a conversion of 22.5 kg.

Responses from the model to p o s i t i v e and negat ive changes i n the va lues of i nd iv idua l a c t i v i t y c o e f f i c i e n t s were reasonably symnetric (see Tables 3-19). This would i nd i ca t e t he p r o b a b i l i t y of a reasonable degree of l i n e a r i t y i n model response, implying t h a t t he model's response to a 10 per c en t change i n an a c t i v i t y c o e f f i c i e n t would bear a f a i r l y d i r e c t p ropo r t i ona l r e l a t i o n s h i p to the changes i n an a c t i v i t y c o e f f i c i e n t requ i red to br ing about a 1 per c e n t increase i n grazing industry n e t income (see Table 2 ) .

Map 1

ANALY

Map 2 : AUSTRALIAN GRAZING INDUSTRY SURVEY ZONES

Table 2: PERCENTAGE CHANGE IN BASE m L OF TECHNICAL COEFFICIENT REWIRED FOR Ahl INCREASE OF 1 PER CENT m GRAZING INDUSTRY NEX INCOME

Technical coeff ic ien t Chan qe

%

Decrease in labour requirements (man-days a year) 0.9 Decrease i n shearing costs ( $ per sheep shorn) 8.3 Decrease in c a p i t a l requirements ($ per animal run) 8.3 Decrease in f e r t i l i s e r requirements ( t /ha) 2.9 Increase in avai lable feed supply (t/ha) 0.6 Increase i n quarter ly pasture carry-over ( t /ha) 2.8 Decrease i n wool s e l l i ng cos t s ($/kg sold) 7.7 Decrease i n wool and l ivestock t ranspor t cos ts ( $ per animal sold) 3.1 Increase in feed to beef conversion (meat y i e ld per beef animal sold) 1 . 2 Decrease in feed intake per beef animal (kg of feed consumed per

animal run per ha) 1.1 Increase in feed t o sheep meat conversion (meat yield per sheep Sold) 2.1 Increase i n feed t o wml conversion (wool cu t per sheep shorn) 1.1 Decrease in feed intake per sheep (kg of feed consumed per

sheep run per ha) 1.2 Increase i n lamb marking r a t e (lambs marked per ewes mated) 2.9 Increase i n ca l f branding r a t e (calves branded per cows mated) 1.8 Decrease i n l ivestock s e l l i n g cos ts ( $ per animal sold) 37.0 Decrease i n sheep veterinarian supplies cos ts ($ per animal run) 22.7 Decrease i n c a t t l e veterinarian suppl ies cos ts ($ per animal run) 37.0

3. Model Results

Labour cos ts on grazing industry proper t ies depend to some extent on enterpr i se or ien ta t ion . I t is estjmated t h a t , in 1976-77, labour (including shearing and cont rac ts ) formed 36 per cent of t o t a l farm cos t s on propert ies devoting 75 per cent or more of t he i r land resources t o sheep. On proper t ies devoting equivalent land resources t o c a t t l e , it formed 27 per cent (see Table 3 ) . On an ove ra l l grazing industry bas i s it formed 24 per cent; t h i s re f lec ted the influence of producers engaged in ( r e l a t ive ly ) l a w labour-input broadacre cropping. Variation in labour i n p l t has obvious implications for the d i s t r i bu t ion of benefi ts (or otherwise) £ran changes in labour productivi ty.

(a ) Labour productivi ty simulations

An increase in labour productivi ty was simulated by decreasing labour input (operator, permanent, and casual l- r e l a t ive to other inputs. A decrease of 10 per cent , concurrently across a l l en terpr i ses and regions, resul ted in an increase Of 11.5 per cent i n grazing industry net income. Gross value of output for both the sheep and c a t t l e a c t i v i t i e s increased, while t ha t for cropping changed very l i t t l e (see Table 4 ) .

T a b l e 3: LABOUR COSTS AS A PERCENTAGE OF TOTAL FARM COSTS ON AUSTRALIAN GRAZING INDUSTRY PROPERTIES: BY EN'ERPRISE TYPE AND ZONE AND FOR AUSTRALIA: 1976-77: Average p e r p r o p e r t y

Sheep dominant fb) Beef dominant f c ) T o t a l A u s t r a l i a n g r a z i n g Zonefa) i n d u s t r y ( d l

L a b o u r l e ) S h e a r i n g f f ) T o t a l Labour S h e a r i n g T o t a l Labour S h e a r i n g T o t a l

High R a i n f a l l 18.0 1 . 8 28.8 24.1 0.3 24.4 20.8 3.7 24.5

Wheat-Sheep 22.5 9.2 31.7 25.6 0.7 26.3 1 8 .O 2.4 21.4

P a s t o r a l 24.9 22.6 47.5 34.6 0.4 35.0 25.1 9.5 34.6

A u s t r a l i a 21.6 14.6 36.2 26.5 0.4 26.9 19.9 4.3 24.2

(a) As d e f i n e d f o r BAE AAGIS. (b) Devot ing more t h a n 75 p e r c e n t o f l a n d a r e a to s h e e p g r a z i n g . ( c ) Devot ing more t h a n 75 p e r c e n t o f l a n d a r e a t o c a t t l e g r a z i n g . (d ) I n c l u d e s s h e e p dominant , c a t t l e dominant , c r o p dominant , s h e e p o r i e n t e d , b e e f o r i e n t e d , c r o p o r i e n t e d , and mixed. ( e ) Exc ludes s h e a r i n g and c r u t c h i n g . ( f ) I n c l u d e s c r u t c h i n g .

Table 4: CHANGE I N INDIVIDUAL ENTERPRISE GROSS VALUE OF OUTPUT AND TOTAL GWZING INWSTRY NET VALUE OF OUTPUT IN RESPONSE TO t10 PER CENT CHANGE I N BASE LEVEL OF LABOUR REQUIREMENTS(a) CONCURRENTtY ACROSS W RELEVAWI ZONES

zone

Gmss value of ou tpu t N e t va lue of output

W o o l Sheep meat To ta l sheep Beef cat t le Crop t o t a l y raz iny e n t e r p r i s e e n t e r p r i s e e n t e r p r i s e e n t e r p r i s e e n t e r p r i s e i n d u s t r y

High R a i n f a l l +9.6 -1.8 +3.7 -1.8 +7.2 -1.8 +1.0 -9.8 . . . . Wheat-Sheep +3.1 -9.6 +11.2 -16.7 +5.7 -11.9 +8.4 +5.3 t O . 1 -3.6

Southern P a s t o r a l +2.3 -1.9 +4.2 . -6.3 +2.7 -2.7 . . .. (b) (b)

Northern P a s t o r a l (b) (b) (b) (b) (b) (b) +4.0 -2.2 (b) (b)

A u s t r a l i a +5.0 -5.5 +7.2 -9.2 +5.7 -6.7 +3.4 -4.6 +0.2 -3.3 +11.5 -13.5

( a ) In man-days, fo r o p e r a t o r , permanent, and casua l labour ; excludes shear ing and c ru tch ing . (b) Crop e n t e r p r i s e s not modelled i n Southern P a s t o r a l Zone, c rop and sheep e n t e r p r i s e s not modelled i n Northern P a s t o r a l Zone. . . Less than 0.1 per cen t .

nn equivalent (simulated) decrease i n labour product iv i ty resu l ted i n a f a l l o f 13.5 per cent i n grazing indus t ry ne t income. I n t h i s case, there was also a marked s h i f t i n production i n favour of the Wheat-Sheep Zone beef a c t i v i t i e s . Overall , the scope fo r achieving increased labour savings i n both sheep and beef a c t i v i t i e s appears promising.

(b) Labour product ivi ty: research and innovation

Sorne labour savings may be achieved a t l i t t l e cos t (e.g. by combining seve ra l husbandry opera t ions such a s crutching, vaccination and j e t t i n g ) . However, m o s t w u l d be condi t iona l on increased investment i n farm s t r u c t u r e s (fences, yards etc.), or i n 'easy-care' stock which requi re less supervision, treatment and supplementary feed.

'Easy-care' sheep such a s the Gramark (Corriedale and Border Leices te r c r o s s ) , Cwpworth (Border Leices te r and Rarmey cross) and Perendale (Cheviot and Ranney cross) have been se lec ted fo r high, unassis ted lambing r a t e s (Journal of W o o l Technology and Sheep Breeding 1978). Fas t growth o f lambs a l m produces animals with leaner carcasses which a r e su i ted to the Middle East market. Another c ross , t he Wil t sh i re Horn and Merino, aims to exp lo i t the Wil t sh i re Rorn's fleece-shedding c h a r a c t e r i s t i c s and to produoe a strong-wool (24-29 micron) sheep which sheds w m l £ram the b e l l y and 'breech a r eas which a r e prone to f l y s t r i k e (Tierney 1978).

Farm s t r u c t u r e s such as secondary yard f a c i l i t i e s and farm laneways which a l l w stock to f ind t h e i r own way back to the paddock (following husbandry operat ions) may r educe droving time. Also, bulk handling and mechanisation can speed up the opera t ions of fodder handling and supplementary feeding.

I n the area of beef c a t t l e husbandry, two innovations which could con t r ibu t e to increased labour e f f i c i ency a r e the e l e c t r i c c a t t l e h o b i l i s e r (Victorian Farmer 1978; Weekly Times 1979) and the scanoprobe (Yeates and Schmidt 1974). The h n o b i l i s e r may make the dehorning, spaying, f w t trinrming, branding and c a s t r a t i n g of older animals less arduous. The scanoprobe, an u l t r a son ic device used f o r ob j ec t ive carcass measurement ' i n t he paddock', may simplify t he s e l ec t ion of finished stock f o r market.

3.2 Shearing and Pa ra s i t e Control

T rad i t i ona l ly , shearing has been a highly labour-intensive opera t ion . It is estimated t h a t shearing and crutching i n 1976-77 formed 14.6 per cent of t o t a l farm c o s t s on prope r t i e s devoting 75 per cent or more Of t h e i r land resources to sheep (see Table 3) . Although, on an o v e r a l l grazing industry bas is , t h i s amounted to only 4.3 per cent of t o t a l farm cos t s , it d id represent the l a r g e s t s i ng l e canponent of labour cos t s . It is not surpr i s ing , therefore , t h a t considerable research e f f o r t has been devoted to seeking methods of increasing the e f f i c i ency of shearing operations.

(a) Sheacinq product iv i ty s imulat ions

An increase i n shearing e f f i c i ency was simulated by decreasing shearing c o s t s by 10 per cent i n r eg iom having sheep a c t i v i t i e s . This

resul ted i n an increase of 1 . 2 per cent in grazing industry ne t income (see Table 5 ) . Viewed i n r e l a t ion to the amount by which shearing and crutching cos t s add to t o t a l farm costs, t h i s is qui te a la rge increase. A s would be expected, the main e f f e c t of t h i s type of productivi ty change was to decrease the cos t per un i t of output rather than t o increase gross cutput. The d i s t r ibu t ion e f f e c t s were marginal: wool output increased s l i gh t ly , while production of sheep meat and beef f e l l .

A decrease in shearing ef f ic iency was simulated by increasing shearing wsts by 10 per cent. This resu l ted in a reduction in grazing industry net incane of 1.1 per cent. I n e f f e c t , t h i s indicated tha t , fo r producers to cover an increase of 10 per cent in shearing cos ts , grazing industry net income would need t o r i s e by an average of a t l e a s t 1.1 per cent . The technical innovations which may have m e impact on t h i s s i t ua t ion are well known. Unfortunately, with those with the g r e a t e s t po ten t i a l t o reduce wsts, there appear to be problems in reaching the s tage of comnercial applicat ion.

(b) Shearinq productivity: research and i ~ o v a t i o n

The layout of many shearing sheds has changed l i t t l e over the pas t century. However, improved designs a r e now available. These incorporate raised boards (with Fawcett mats) facing the c lass ing area , c i r cu la r wool tab les and holding bins midway between c lass ing and pressing areas. Walking time required by shearers and shedhands is g rea t ly reduced. In addit ion, the greater bale dens i t i e s obtained with e l e c t r i c wool presses should reduce wool s torage and t ranspor t costs .

Newly developed shearing machinery, such a s shearing tab les , pneumatic-driven handpieces, more-flexible down-tubes (for ex is t ing handpieces1 and conveyor systems t o cont ro l the sheep during shearing should reduce the physical e f f o r t required of the shearer. In some cases, t h i s new handling equipment may allow individual shearers 'on the chain' to spec ia l i s e i n pa r t i cu l a r blows rather than having t o master a l l the blcus required to shear the sheep (Barber 1976).

Though not a c o m e r c i a l proposi t ion a t present , chemical shearing appears to o f fe r the best long-term prospect for reducing -1-harvesting cos ts . Chemical shearing involves t r ea t ing the sheep with a chemical which temporarily r e t a rds wool growth and allows the wool to be pulled o f f (CSIRO 1975a). Chemical wool removal would a l s o be of use in other a r eas of sheep husbandry. Chemical crutching using calcium th ioglycol la te has been invest igated. Another process, chemical mulesing and ringing, uses a 40:60 mixture of phenol (carbolic acid) and water, with an emuls i f ie r , to k i l l fo l l ic le -bear ing sk in (Richardson 1976).

Other methods of shearing being invest igated include handpieces which use l a se r s , or hot-gas (plasma) in place of cu t t ing blades. Rotwire (or hotblade) methods of flame severance are a l s o being investigated. A s ye t , none of these non-mechanical methods are near to being comerc ia1 propositions (CSIRO Wool Research Cami t t ee 1977).

(c) Sheep paras i te control : research and innovation

The value of production l o s t because of pa ra s i t e a t tack on sheep, and the cos t of prevention and treatment have been estimated a t almost 10 per

Table 5: CHANGE I N INDIVIDUAL EVFERPRISE GROSS VALUE OF CUTPUT AND TOTAL GRAZING INDUSTRY NCP VALUE OF CUTPUT I N RESPCNSE TO t10 PER CEm CHANGE I N BASE LEK% OF SHEARING AND CRU'ICHING COSTS CaVCURRENTLY ACROSS ALL RELEVAW ZONES

Zone

Gross value of output N e t value of output

W w l Sheep meat Total sheep Beef c a t t l e crop t o t a l grazing en t e rp r i s e en t e rp r i s e en t e rp r i s e en t e rp r i s e en t e rp r i s e industry

-10% +lo% -10% +lo% -10% +lo% -10% +lo% -10% +lo% -10% +lo%

+. a 8 B u 8 u 8 B B B 8 a rn

High Rainfa l l +0.3 . . . . .. +0.2 .. +0.2 +1.0 . . . . Wheat-Sheep +0.2 -0.6 . . -0.9 +0.1 -0.7 -1.3 +2.6 . . . . Southern Pas tora l .. -3.7 -4.2 -4.2 +0.8 -3.8 . . .. (a) ( a )

Northern Pas tora l (a) (a) (a) (a) (a) (a) (a) (a) (a) (a)

Aus t ra l ia +0.2 -1.1 -0.4 -0.8 .. -0.1 -0.2 +1.1 . . .. +l.Z -1.1

(a) Crop en t e rp r i s e s not modelled i n Southern Pas tora l Zone; crop and sheep en t e rp r i s e s not modelled i n Northern Pas tora l Zone. .. Less than 0.1 per cent.

cent of the gross value of wool ~ r o d u c t i o n each season (BRE 1972). P a r t i a l replacement of labour-intensive cont ro l methods (Such a s crutching and drenching) by chemical methods which a r e not so labour intensive (e.9. j e t t i n g and multi-purpose anti-helminthic vaccines) has reduced the labour m m p e n t of these operat ions.

Biological cont ro l of pa ra s i t e s , p a r t i c u l a r l y of t he sheep blowfly, is a l so being invest igated (CSIRO 1970a). However, given the widespread d i s t r ibu t ion of this pes t , the l o g i s t i c s of b io logica l cont ro l a r e daunting. The best p o s s i b i l i t y for b io log ica l cont ro l may r e s t with the dung bee t le o r ig ina l ly contemplated a s a b io logica l control for t he buffa lo f l y , an externa l pa ra s i t e of c a t t l e .

(d) Ca t t l e pa ra s i t e control : research and innovation

Aus t r a l i a ' s main c a t t l e pa ra s i t e is the c a t t l e t i ck , which i n f e s t s the higher r a i n f a l l areas i n the north and north-east of the continent . The cos t s of t ick cont ro l have r i sen in recent years , p r inc ipa l ly due t o the spread of severa l s t r a i n s of r e s i s t a n t t i c k (AMRC 1975). Cross-breeding of Br i t i sh c a t t l e with the t r o p i c a l l y adapted Bos i n d i m s is seen a s the most l i k e l y long-term solut ion. An added bene f i t of c ros s breeding is the reduced need to t r e a t for foo t ro t , cancer eye, pink eye and some in t e rna l p a r a s i t e s (Turner 1978).

3.3 Farm Machinery and St ruc tures

The value of machinery, vehicles , and s t ruc tu re s on AAGIS p rope r t i e s is estimated to have accounted f o r 31 per cent of the t o t a l value of a l l c a p i t a l (including l ivestock and land) i n 1976-77. The long-term nature of c a p i t a l invesbnent introduced sane d i f f i c u l t y i n s imulat ing productivi ty change in t h i s area.

(a) Capi ta l product iv i ty simulations

In the model, c a p i t a l such a s p l an t , machinery and s t ruc tu re s is spec i f ied a s an annual requirement. An increase in c a p i t a l e f f i c i ency was simulated by reducing t h i s requirement by 10 per cent across a l l regions. ' In e f f e c t t h i s reduced the i n t e r e s t payable on funds used f o r the purchase of cap i t a l . This resu l ted in a r i s e of 1.2 per cent i n grazing industry net incane (see Table 6 ) . Unfortunately, l i t t l e can be concluded from this, a s it is obvious t h a t innovations i n t h i s area w i l l be re f lec ted mainly in other areas, such a s labour use. In aPdit ion, plant , machinery and s t ruc tu re s form a much smaller component of a s p e c i a l i s t sheep or beef producer's c a p i t a l investment than, for example. t ha t of a producer engaged in broadacre cropping. For the sheep or beef s p e c i a l i s t , fixed s t ruc tu re s such a s fences and yards a re major investments. It is in t e re s t ing t o examine some of the more recent developnents in t h i s area.

(b) Fences and stock vards: research and innovation

Tradi t ional ly , fence strength has been associated with the number o f posts per chain. Eowever , improved construct ion techniques (such a s high-tensi le p l a in wire and ringlock fencing) have permitted t h e construction of fences of equivalent s t rength with fewer posts per chain (Bishop 1978).

Table 6: CHANGE IN INDIVIDUAL EWERPRISE GROSS VALUE OF OUTPUT AND TOTAL GRRZING INDUSTRY NET VALUE OF OUTPUT I N RESPCPlSE TO z10 PER CEm CHANGES I N BASE LEVEL OF CAPITAL REQUIREMENTS (a) CONCURWNTLY ACROSS ALL RELEVANT ZONES

Zone

Gmss value of output N e t value o f output

Woo1 Sheep meat Total sheep Beef c a t t l e Crop t o t a l grazing en t e rp r i s e en t e rp r i s e en te rpr i se en t e rp r i s e en te rpr i se industry

High Rainfa l l +3.3 +0.3 +2.8 .. +3.1 +0.2 +1.6 -2.0 . . . . Wheat-Sheep +O.Z -0.4 -0.4 +0.4 . . -0.1 -0.9 +3.5 -0.1 -0.7

Southern Pas tora l . . . . .. -2.1 .. -0.4 . . .. (b) lb)

Northern Pas tora l (b) (b) (b) (b) (b) (b) t0.9 +0.9 (b) (b)

Aus t ra l ia +l.2 -0.1 +1.0 .. +1.1 -0.1 -0.8 . . .. -0.6 +l.2 -0.4

(a) Cap i t a l requirement per animal run. (b) Crop en te rpr i ses not modelled i n Southern Pas tora l Zone; crop and sheep en te rpr i ses not modelled i n Northern Pas tora l Zone. .. Less than 0.1 per cent.

Suspension fences - which d i f f e r from conventional fences in t ha t loads are borne mainly by wires and end assemblies rather than by the posts - have been constructed with s t r a i n s of over 6 km. However, s t r a i n s of 1%-2 km seem optimal (Stock and Land 1978a). Long s t r a i n s of fer severa l advantages. Less tension is l o s t a f t e r tying off the wire or because of movement i n the s t r a ine r assembly. Fewer assemblies mean lower mater ia l and labour cos t s , Part of these labour savings a r i s e from not having to thread wire through bored holes i n the posts . Maintenance cos ts may a l so be l e s s , s ince animals do not l i k e f l ex ib l e fences and a r e l e s s incl ined t o rub on them (Stock and Land 1978b).

Suspension fences can be l i f t e d t o allow l ivestock t o walk underneath. Pivotted posts allow farm vehicles t o drive over these fences, which then spring back in to pos i t ion (Land 1978) and the time involved in stock inspection and in moving stock and la rge implements from paddock t o paddock is, therefore, reduced.

E lec t r i c fencing can be used e i t h e r in conjunction wjth suspension fencing or t o extend the usefu l l i f e of ex is t ing conventional fences. It can be powered by mains, ba t t e ry or so lar energy un i t s (Palmer 1978). Attaching f o i l s t r i p s which r e f l e c t sunlight can provide a v i sua l deterrent .

For c a t t l e , prefabricated s t e e l yards, incorporating a crush and b a i l , ca l f race and loading ramp, have replaced bronco yards on some northern propert ies . Husbandry operat ions such a s blood sampling, vaccination, pregnancy tes t ing and weighing have been made eas ier and quicker with portable yards (Yeates and Schmidt 1974). Other new fixed yard designs incorporate c i r cu la r holding yards, forcing yards with 360 degree ga tes , and curved tapered races.

3.4 F e r t i l i s e r

Expenditure on f e r t i l i s e r i n 1976-77 is estimated t o have formed 6.4 per cent and 5.3 per cent of t o t a l farm cos t s on proper t ies i n the Wheat-Sheep and High Rainfal l Zones, respect ively, but to have been negligible in the Pas tora l Zone.

I t is estimated tha t , on average, f e r t i l i s e r const i tuted 5.2 per cent of t o t a l farm cos ts for the grazing industry a s a whole: it ranked. therefore, s l i g h t l y above shearing and crutching a s a component of t o t a l farm costs .

(a) F e r t i l i s e r productivi ty simulations

The e f f e c t s of changes in p roduc t i t i v i ty in t h i s area were simulated by varying the f e r t i l i s e r requirement of improved pasture a c t i v i t i e s . For instance, a productivi ty increase was simulated by reducing f e r t i l i s e r use over a given area of improved pasture.

Changes in the ef f ic iency of f e r t i l i s e r use did not r e s u l t i n s ign i f i can t changes in output e i t he r by zone or by a c t i v i t y (see Table 7) . It is l i k e l y tha t the decrease (or increase) i n f e r t i l i s e r use i n each a c t i v i t y resul ted i n a decrease (or increase) i n the t o t a l use of f e r t i l i s e r ove ra l l . Consequently, although t h i s had no s ign i f i can t eEfect on gross value of output, cost of production was d i r e c t l y

Table 7: CHANGE I N INDIVIDUAL ENTERPRISE GROSS VALUE OF OUTPUT AND TOTAL GRAZING INDUSTRY NET VALUE OF CUTPUT IN RESP(3NSE TO 210 PER CENT CHANGES IN BASE LEVEL OF FERTILISER REQUIREMENTS (a) CONCURRENTLY A C ~ S S ALL RELEVANT ZCNES

c m s s value of output N e t value o f

Zone output

Wool Sheep meat Total sheep Beef c a t t l e Crop t o t a l grazing en t e rp r i s e en t e rp r i s e en t e rp r i s e en te rpr i se en t e rp r i s e industry

-10% +lo% -10% +lo% -10% +lo% -10% +lo% -10% +lo% -10% +lo%

N a 8 8 a a a a a a 8 8 %

0

High Rainfa l l +0.3 . . . . .. +0.2 . . .. -0.2 . . . . Wheat-Sheep . . . . . . . . . . . . . . . . . . . . Southern Pas tora l . . . . . . . . . . . . . . . . (b) lb)

Northern Pas tora l (b) (b) (b) (b) (b) (b) +0.9 +0.4 (b) (b)

Austral ia . . . . . . . . . . .. +0.2 . . . . .. +3.4 -3.1

(a) t h a . (b) Crop en t e rp r i s e s not modelled i n Southern Pas tora l Zone; crop and sheep en t e rp r i s e s not modelled i n Northern Pas tora l Zone. .. Less than 0.1 per cent.

affected. In aggregate, a decrease of 10 per cent i n the f e r t i l i s e r requirement for each a c t i v i t y increased grazing industry ne t income by 3.4 per cent , while an increase of 10 per cent decreased grazing industry net income by 3.1 per cent.

(b) F e r t i l i s e r use : research and innovation

Australian soils show widespread def ic ienc ies of phosphorus and nitrogen. Some soils in high r a i n f a l l a reas show def ic ienc ies of sulphur and potassium, while many show def ic ienc ies of t race elements, including copper, zinc, molybdenum, cobal t , manganese and boron. The contr ibution of a r t i f i c i a l f e r t i l i s e r s (superphosphate in pa r t i cu l a r ) t o improving productivi ty i n Australian agr icu l ture is well known (e.9. see BAE 1975a). What is not well known is the extent t o which these gains could be maintained, given a smaller ( i .e . more e f f i c i e n t ) input of f e r t i l i s e r . Current invest igat ions include research into:

. methods of applicat ion, pa r t i cu l a r ly a e r i a l applicat ion: . ways of making p l an t s u t i l i s e phosphorus more e f f i c i e n t l y ; . ways of using rock phosphate ( ra ther than the more processed superphosphate) : . methods by which producers can assess the f e r t i l i s e r needs of t h e i r paddocks more accurately; and . biological recycling of nut r ien ts .

(i) Aerial applicat ion

I t has been found tha t a e r i a l applicat ion of superphosphate consist ing of a range of p a r t i c l e s i ze s may lead t o narrow and uneven d i s t r ibu t ion along the f l i g h t path (CSIRO 1970b). Granulation of superphosphate r e su l t s i n a more even d i s t r ibu t ion : la rge p a r t i c l e s a r e thrown fur ther , dust is eliminated, and f e r t i l i s e r runs through machinery more f ree ly . Although there appears no idea l granule s i ze for a l l soils and a l l environments, p a r t i c l e s of 2.5 m diameter have been found to give the bes t r e su l t s over a wide range of conditions. This s i ze i s a l s o regarded a s the minimum des i rable for e f f i c i e n t operation of the CSIRO's ' te trahedron' spreader (CSIRO 1973a).

(ii) Vesicular arbuscular mvcorrhiza

Plants may lack phosphorus for two reasons - f i r s t l y , t he nu t r i en t is i n a chemical form which the plant roots cannot absorb and, secondly, t he roots can tap nut r ien ts only from a l imited volume of s o i l . One way o f allowing legumes to u t i l i s e phosphorus more e f f ec t ive ly is to innoculate them with selected s t r a i n s of fungi which l i v e inside the roots of crops and pasture p lants i n a symbiosis known a s a vesicular arbuscular mycorrhiza. By penetrat ing the s o i l between the roots very e f f i c i e n t l y , the fungus e f f ec t ive ly provides the p lant with a la rger root surface area through which to absorb nu t r i en t s (CSIRO 1977a).

Some soil bac ter ia ( t h i o b a c i l l i ) feed on elemental sulphur and produce sulphuric acid a s a waste product. Sulphur and t h i o b a c i l l i mixed with rock phosphate in p e l l e t s ( 'bio-super') has proven a reasonable

subs t i t u t e for more expensive superphosphate in t rop ica l regions with an annual r a i n f a l l of over 635 wo (CSIRO 1974a).

( i v ) Assessing the f e r t i l i s e r needs of paddocks

Exist ing methods of tes t ing soil f e r t i l i t y and determining spec i f i c mineral def ic ienc ies , e.g. sorp t ion t e s t s , may soon be augmented by spec ia l i sed s a t e l l i t e photography. Computer simulation models a re a l s o f inding applicat ion (e.g. CSIRO 1974b). Where economic, f e r t i l i s e r appl ica t ion a l s o may be oriented toward providing nu t r i en t s required by the animal i t s e l f .

(v) Nutrient recyclinq

The 200-300 M t of c a t t l e dung produced in Austral ia each year contain about 1 M t o f phosphorus and 250 k t o f ni t rogen - more of these elements than is applied each year i n the form of mineral f e r t i l i s e r . Much of the dung l i e s on the surface for 6-12 months: nearly a l l its nitrogen is soon l o s t to the a i r . The dung a l so provides a breeding s i t e for many pes t s , including bash f l i e s and buffalo f l i e s . Since nat ive dung bee t les cannot adequately dispose of c a t t l e dung, exot ic dung bee t le species have been imported and released. These a r e now w e l l es tabl ished over more than a mi l l ion square kilometres of northern and eas tern Australia. Researchers a re a l so l a k i n g for types s u i t a b l e for southern areas (CSIRO 1978a).

3.5 Feed Production

Pasture production represents t he in t e rac t ion of the plant with both soil and climate. While l i t t l e can be done t o influence climate (other than by i r r i g a t i o n ) , s o i l f e r t i l i t y can be improved by f e r t i l i s e r appl ica t ion . A t the same time, feed production can be increased by the use of p lant species ab le to u t i l i s e t h i s new soil environment more e f f ec t ive ly .

Replacement of nat ive pastures with introduced species, plus the addit ion of legumes such a s subterranean clover , has led to a s ign i f i can t improvement in pasture qua l i t y and a v a i l a b i l i t y . This, together with superphosphate appl ica t ion and r abb i t con t ro l , has been estimated t o have increased the carrying capaci ty of southern pastures by 180 mil l ion sheep equiva lents , or half the t o t a l grazing pressure in Austral ia (Waring and Morris 1974).

( a ) Feed productivi ty simulations

A simulated increase of 10 per cent i n feed avai lab le for sheep and c a t t l e each quarter increased grazing industry net incane by 16.8 per cent (see Table 8 ) . Gross value of output increased for both the sheep and c a t t l e indus t r ies i n a l l zones and a c t i v i t i e s , re f lec t ing the overr iding importance of feed supply to a l l s ec to r s of the grazing industry. A decrease in feed a v a i l a b i l i t y reduced net value of output t o the grazing industry by 18 per cent .

Simulation of an increase of 10 per cent in feed carry-over for a l l qua r t e r s increased grazing industry net incane by 3.6 per cent (see Table 9 ) . Most of t h i s increase was a t t r i b u t a b l e t o an increase of

Table 8: CHANGE I N INDIVIDUAL ENTERPRISE GROSS VALUE OF WTPUT AND TOTAL GRAZING INDUSTRY NF2 VALUE OF OUTPUT IN RESPDNSE TO 210 PER CEWI CHANGES I N BASE LEVEL OF F E D SUPPLY(a) CDNCURRENTLY ACROSS ALL RELEVANT zmFS

Gmss value of ou tpu t N e t va lue o f output

Wool Sheep meat Tota l sheep Beef c a t t l e Crop t o t a l g raz ing e n t e r p r i s e e n t e r p r i s e e n t e r p r f s e e n t e r p r j s e e n t e r p r i s e i n d u s t r y

High R a i n f a l l -1.2 +7.8 -2.3 +7.4 -1.6 +7.6 -14.2 +5.1 .. . . Wheat-Sheep -5.1 t9.8 -2.2 +6.9 -4.1 +8.8 -7.9 +7.9 -2.7 +1.8

Southern P a s t o r a l -5.6 +4.6 -6.3 +8.3 -5.7 +5.3 . . . . . . . . Northern P a s t o r a l . . . . . . . . . . . . -28.7 +41.3 .. . . A u s t r a l i a -3.9 +8.1 -2.6 +7.2 -3.5 +7.8 -16.0 +14.1 -2.5 -1.6 -18.0 16.8

. . . . . . . , ' (a), t/ha. .: ib),,.Crop e n t e r p r i s e s no t modelled i n Southern P a s t o r a l Zone; c r o p and sheep e n t e r p r i s e s no t

mode l l ed , in Northern P a s t o r a l Zone. .. Less than 0.1 pe r cent .

Table 9: CHANGE I N INDIVIDUAL ENTERPRISE GROSS VALUE OF OUTPUT AND TOTAL GRAZING INDUSTRY NET VALUE OF OUTPUT I N RESPONSE TO 210 PER CENT CHANGES IN BASE LEVEL OF PASTURE CAPRY-OVEX(a) CCNCURRENTLY ACROSS ALL RELEVANT ZONrS

Gross value of output Net value of output

W o o l Sheep meat Total sheep Beef c a t t l e Crop t o t a l grazing en te rpr i se en te rpr i se en te rpr i se en t e rp r i s e en te rpr i se industry

- High Rainfa l l .. +0.3 . . . . .. +O.Z -0.4 +0.2 -0.7 +0.4

Wheat-Sheep +0.2 +0.6 +1.3 -0.4 +0.6 +0.1 -2.6 +1.8 -0.5 ~ 0 . 3

Southern Pas tora l -1.4 +1.4 -2.1 +2.1 -1.5 +1.5 . . .. (b) (b)

Northern Pas tora l (b) (b) (b) 1 b) (b) (b) -21.5 +18.4 (b) (b)

Aus t ra l ia -0.2 +O.S +0.2 . . -0.1 +0.3 -5.8 +4.9 -0.3 +0.3 -4.4 +3.6

(a) t /ha . (b) Crop en t e rp r i s e s not modelled i n Southern Pas tora l Zone; crop and sheep en t e rp r i s e s not modelled i n Northern Pas tora l Zone. .. Less than 0.1 per cent.

4.9 per cent in gross value of output from the c a t t l e industry, re f lec t ing the s e n s i t i v i t y of beef production to seasonal feed shortages. Outplt from sheep and crop en te rp r i se s was la rge ly unaffected.

(b) Peed production: research and innovation

Further increases in feed a v a i l a b i l i t y may r e s u l t from:

. se lec t ive pasture improvement and fodder cropping; . cont ro l of pasture pes ts and diseases; . more-efficient use of ex i s t i ng feed, fodder and crop stubble; and . use of i ndus t r i a l by-products a s stock feeds.

(i) Pasture improvement and fodder cropping

While the 'pasture revolution' i n southern Austral ia may be la rge ly over, introduction of t rop ica l legumes i n t o northern Austral ia o f f e r s potent ia l . To date, Townsville s t y l o has formed the bas is for t rop ica l pasture improvement. However, s ince 1963, a wide range of s tylosanthes species has been introduced from Central and South America. Cult ivars such a s Verano and Seca may extend the range of sown legumes fur ther i n t o dry areas. Both have performed s a t i s f a c t o r i l y i n a reas receiving an average annual r a i n f a l l of 600 m (CSIRO 1977b). Seca has a l s o performed well in a reas receiving an average annual r a i n f a l l of up t o 1700 nun. In these areas Townsville s ty lo , being an annual, cannot mmpete well with perennial grasses. Despite co l l ec t ions already made in t r o p i c a l areas, only a m a l l f r ac t ion of the ava i lab le s ty los have yet been introduced. One problem, however, may slaw fur ther s t y l o developnent. This problem (evident s ince 1973) is the spread of a fungus which produces anthracnose disease i n most s tylosanthes species. Anthracnose has noticeably reduced the carrying capacity of sane pastures and has d r a s t i c a l l y lowered seed production (CSIRO 1978b).

New fodder crops for northern Aust ra l ia a re being evaluated. These include short-grain r i ce , cassava, elephant grass and leucena. Short-grain r i ce has been suggested a s a subs t i t u t e for sorghum in north Queensland. Cassava, a crop which can be harvested a t any time throughout the year, has been grown successfu l ly in dry areas without i r r i ga t ion . Leucena, a perennial leguminous t r e e whose fo l iage y ie lds up t o 35 per cent pro te in on a dry-weight bas is , could provide a valuable supplement for c a t t l e during the dry season. Mimosine poisoning was an ea r ly drawback; but CSIRO is cu r ren t ly breeding a low-mimosine comnercial cu l t i va r (Queensland Country Li fe 1978).

(ii) Control of pasture pes ts and d iseases

Recent b io logica l cont ro ls introduced t o counter weed competitors and pasture pes ts include a ru s t fungus s p e c i f i c t o skeleton weed (CSIRO 1972a), na tura l predators of such in sec t s a s the lucerne f lea and the red-legged ear th mite (CSIRO 1976a) and a wasp predator of army-worm and cut-worm (Australian Country Magazine 1979a).

Spraying to cont ro l locus ts is most e f f i c i e n t i f done a t the wingless nymphal stage. Timely information on locus t s reaching t h i s s tage w i l l be provided i n fu ture by monitoring pas to ra l conditions using s a t e l l i t e phoeograMs (Tuck 1979).

pes t - r e s i s t an t p l a n t s have a l s o been introduced. A recent example is the in t roduc t ion f r m overseas of new lucerne spec ies more r e s i s t a n t t o the lucerne aphid than l o c a l v a r i e t i e s . Low-oestrogen (low-formononetin) c love r s have been used to replace oes t rogenic c lovers responsible f o r clover d i s ea se , which lowers the f e r t i l i t y of sheep, p a r t i c u l a r l y i n Western Aus t ra l ia and South Aus t r a l i a (CSIRO 1975b). F ie ld t r i a l s using mixtures of high- and low-oestrogen s t r a i n s have shown t h a t many of the s a f e r c u l t i v a r s have t he a b i l i t y t o d i sp l ace high-oestrogen ones.

( i i i ) More e f f i c i e n t use of e x i s t i n g feed, fodder and c rop s tubble

CSIRO research has demonstrated t h a t the nu t r i en t value and p a l a t a b i l i t y of carry-over pas ture may be preserved with paraquat, an a r t i f i c i a l dess ican t (CSIRO 1971). Also, the p a l a t a b i l i t y of dry pa s tu r e s t o sheep has been shown t o increase with t he presence o f sulphur a v a i l a b i l i t y (CSIRO 1972b). Sulphur can be provided d i r e c t l y through f e r t i l i s e r s or i n d i r e c t l y through sulphur-rich legumes.

I n s w t h e r n Aus t ra l ia , lucerne f r ac t i on ing ( the process of separa t ing lucerne i n t o a high-protein concent ra te to be fed t o non-ruminants and a high-f ibre f r ac t i on w be fed t o sheep and c a t t l e ) could lead to a more e f f i c i e n t u t i l i s a t i o n of p l an t p ro t e in , much of which is l o s t in the convent ional hay-making process (CS IRO 1976 b .

Another source o f fodder could be chemically t r ea t ed c e r e a l straw. ~ a c h year , Aus t ra l ian c e r e a l growers p l a n t over 12 mi l l ion ha of c e r e a l s for g r a i n which, when harvested, l eave near ly 30 M t of c e r e a l straw. Trea t ing t h i s s t raw with c a u s t i c soda, urea and se lec ted minerals improves not on ly its d i g e s t i b i l i t y but a l s o its e d i b i l i t y . Theore t ica l ly , i f a l l the s t raw produced each year were t r ea t ed t h i s way, Aus t ra l ian ce r ea l growers could feed an e x t r a 87 mi l l ion sheep o r 11 mi l l i on c a t t l e (Austral ian Country Magazine 1979b).

( i v ) U s e o f i n d u s t r i a l by-products a s stock feeds

In U.S. t r i a l s , t he manufacture o f methane gas £run cow manure has been shown to produce t w o u se fu l by-products, a high-protein l ives tock feed and a ni t rogen-r ich f e r t i l i s e r (Raliburton 1978). In other U . S . t r i a l s , s t e e r s have demonstrated good performance on a low-quality forage d i e t containing cement k i l n dus t (Cattleman 1978a).

P w r q u a l i t y roughages, such a s bagasse, mod-pulp waste, and wheat and r i c e s t raw, might con t r i bu t e t o beef production i f t h e i r d i g e s t i b i l i t y could be improved by t reatment . Grain dust a t Austral ian p o r t s can now be converted to animal feed by a p e l l e t i n g process (CSIRO I 1 9 7 8 ~ ) . I n other Aus t ra l ian experiments, sheep have been shown t o p e r f o n w e l l on a d i e t o f processed computer paper (CSIRO 1974~1 .

J

3.6 Wool and Livestock S e l l i n 2

Improved s e l l i n g , s t o r i n g , and handling procedures throughout the w m l marketing chain a re being inves t iga ted a s a means of reducing the cost of wool s e l l i n g . 1

(a) Wool se l l inq: productivi ty simulations

Wool s e l l i ng costs , a s spec i f ied in the model, cons is t of an amalgamation of various charges ca lcula ted on a per kilogram of greasy W m l bas is . These charges include w w l tax, commission, c o s t of wool packs, warehousing and insurance.

An increase in the ef f ic iency of the wool s e l l i n g process was Simulated by reducing wool s e l l i ng cos t s by 10 per cent . This brought about changes to grazing industry ne t income equal to those brought about by similar changes in wml harvesting c o s t s (see Table 10) . As with reduction in harvest ing, the pr inc ipa l e f f e c t of changes in t h e costs of w w 1 s e l l i ng was the reduction of t o t a l farm cos t s rather than an increase in wool production.

I I On a na t ional basis , a reduction of 10 per cent in wl s e l l i n g cos ts

r resul ted in an increase of 1.3 per cent i n grazing industry net incane: an increase of 10 per cent reduced grazing industry net income by 1.4 per cent. Although m e resource t r ans fe r s occurred between wool and beef c a t t l e a c t i v i t i e s , these did not appear t o be of g rea t s ignif icance. The woo1 a c t i v i t y of the southern Pas to ra l Zone demonstrated a markedly asyranetric respmse , reducing output in response to higher s e l l i ng costs, yet not increasing output when s e l l i n g c o s t s were reduced. This probably ref lec ted l i m i t s to production and the lack of a l t e r n a t i v e s to wool growing in t h i s zone. By con t r a s t , in the Wheat-Sheep Zone, with its wider range of production a l t e rna t ives , some resource t ransfer between w m l and beef c a t t l e a c t i v i t i e s was evident.

I" (b) Wool se l l inq: research and innovation

In 1977, over 75 per cent of auct ion o f f e r ings of wool were on a sale-by-sample basis . The phasing ou t of t r a d i t i o n a l inspection procedures in favour of s a l e by sample has already had a s ign i f i can t impact on -1 handling procedures. The ul t imate object ive, beyond the h e d i a t e objec t ive of 1 0 0 p e r cent s a l e by sample, is s a l e by descript ion (Ward 1978).

k Sale by descript ion w u l d a l l w el iminat ion of cent ra l i sed auctions - i n which buyers inspect e i t h e r an offered ba le or sample from the bale - i n favour of decentral ised, wmputerised sa les . This w u l d permit w m l to be stockpiled a t c e n t r a l loca t ions , so reducing storage

! and handling cos ts . I t w u l d a l so el iminate the need t o ident i fy and sh ip wml in individual consignments, thus simplifying documentation in wool s tores . Wool could be stored adjacent to por ts p r io r to shipping, Or even sold in t r a n s i t , and the delay between m i l l orders and de l ive r i e s w u l d be reduced. Timeliness of supply may make wool more competitive with synthe t ics , qu i t e apar t f ran any savings in buyers' cos t s which may r e su l t .

Other benef i t s could r e s u l t from current changes in methods of wool packaging. Except for a s l i g h t increase in average weight, t o 150 kg, the standard Australian farm bale has changed l i t t l e i n s i z e over the pas t few decades (Ward 1978). The advent of denser ba les , i n pa r t i cu l a r the 'jumbo' bale of 450 kg, is expected to reduce msts of s torage, f r e igh t and handling.

Table 10: CHANGE I N INDIVIDUAL ENTERPRISE GROSS VALUE OF WTPUT AND TOTAL GRAZING INDUSTRY NET VALUE OF WTPUT I N RESPONSE TO + l o PER CENP CHANGES I N BASE LEVEL OF WM)L S E m I N G COSTS(a) CONCURRENTLY ACWSS ALL RELEVANP ZONES (b)

cmss valoe of output N e t value of

zone

output

W o o l Sheep meat Total sheep Beef c a t t l e Crop t o t a l grazing en te rpr i se en te rpr i se en te rpr i se en te rpr i se en te rpr i se industry

% % % % % % % % % 8 8 8 N m

High Rainfal l +0.3 . . . . .. +0.2 .. +0.2 +1.0 . . . . Wheat-Sheep +0.2 -0.6 . . -0.9 +0.1 -0.7 -1.3 +2.6 . . . . southern Pas tora l .. -4.2 . . . . .. -3.4 . . . . (b) (b)

Northern Pas tora l (b) (b) (b) (b) (b) (b) (b) (b) (b) (b)

Aus t ra l ia +0.2 -1.1 . . -0.4 +0.1 -0.9 -0.2 +1.1 . . .. +1.3 -1.4

(a) $/kg sold. (b) Crop en te rpr i ses not modelled in Southern Pas tora l Zone; crop and sheep en te rpr i ses not modelled i n Northern Pas tora l Zone. .. Less than 0.1 per cent.

In addit ion t o the d i r e c t bene f i t s accruing from objec t ive measurement within the marketing chain, there could be an i n d i r e c t benefi t i n the area of sheep select ion. More e f f i c i e n t operat ion Of the p r i ce mechanian may r e s u l t i n sheep se l ec t ion being more c lose ly r e l a t ed to buyer requirements.

(c) Livestock se l l i ng : research and innovation

More e f f i c i e n t s e l l i ng , s tor ing , and slaughtering procedures throughout the l ives tock marketing chain could reduce the costs of livestock se l l i ng . Bowever, a s with wml s e l l i n g , t h i s is l i k e l y to hinge on the developnent and t rade acceptance of ob jec t ive c r i t e r i a for describing the marketable c h a r a c t e r i s t i c s of sheep, c a t t l e and lamb carcasses. This would a l l a r s a l e s t o be conducted i n cent ra l i sed s e l l i n g cent res v ia an e l ec t ron ic link-up of buyers (Cattleman 1978b; Victorian Journal of Agricul ture 1978).

Live auct ion, still the most commonly used s e l l i n g method i n the southern S t a t e s , s u f f e r s f ran many disadvantages. Because it involves double-handling. a beast may a r r ive for s laughter i n a more s t ressed and bruised condit ion than i f it had made only one journey. Exhaustion, s t r e s s , and nervousness i n the beast p r i o r to slaughter a l l adversely a f f e c t meat qua l i t y (Wythes 1978).

Weight-and-grade s e l l i n g - i n which cattle a re del ivered d i r e c t l y t o meatworks - is the dominant s e l l i n g method i n the Northern Ter r i tory , the Kimberleys and m o s t of Queensland. An extension of t h i s s e l l i n g method in to the l a rge markets of the southern S t a t e s may r e s u l t i n increased ef f ic iency of handling. Rowever, there a r e some i n s t i t u t i b n a l cons t ra in ts to be overcane (see BAE 1978).

3.7 Wml and Livestock Transport

(a ) Wool and l ives tock transport : p roduct iv i ty simulations

An increase i n the e f f i c i ency of t he grazing industry 's t ranspor t system was simulated by decreasing waol and l ivestock t ranspor t costs by 10 per cent concurrently across a l l regions. This resul ted i n an increase of 3.2 per cent i n grazing indus t ry ne t income. Gross value of ou tp l t from the sheep industry remained v i r t u a l l y unchanged, while t h a t from the heef indus t ry increased marginally (see Table 11). Within t he beef industry, a m a l l rea l loca t ion Of o u t p l t f r m the Northern Pas tora l Zone t o the Aigh Rainfa l l and Wheat-Sheep Zones was evident.

(h) Wool and l ives tock transport : research and innovation

Transport c o s t s a r e influenced by both d is tance t rave l led and by the qua l i t y of road surfaces. The building of heef roads i n northern Austral ia has benefi ted c a t t l e production i n various ways:

. drought-affected stock can be ag i s t ed away, then returned a t a f r ac t i on of the cost of t o t a l replacement:

. weight loss during road transport is negl ig ib le ;

Table 11: CHANGE IN INDIVIDUAL mERPRISE GROSS VALUE OF CUTPUT AND TOTAL GRAZING INDUSTRY NET VALUE OF OUTPUT I N RESPONSE TO _+lo PER CEW CHANGES I N BASE LEVEL OF WaOL AND LIVESTOCK TRANSPORT COSTS CONCURRENTLY ACROSS ALL RELEVAh'T ZONES (b)

~ r o s s value of output Net value of output

Wool Sheep meat Total sheep Beef c a t t l e Crop t o t a l grazing en te rpr i se en te rpr i se en te rpr i se en te rpr i se en te rpr i se industry

High Rainfal l . , . . . . . . . . .. +3.2 +0.4 . . . . Wheat-Sheep -0.6 +O.Z -0.4 . . -0.6 +0.1 +4.8 -1.3 -0.1 0.0

Southern Pas tora l -0.9 .. +4.2 . . . . . . . . . . (b) (b)

Northern Pastoral (b) lb) (b) (b) (b) (b) -5.4 .. (b) (b)

Austral ia -0.5 +0.1 +O.Z . . -0.3 +0.1 +1.6 -0.1 -0.1 +0.1 +3.2 -3.2

(a) $/animal sold. (b) Crop en te rpr i ses not modelled i n Southern Pas tora l Zone; crop and sheep en te rpr i ses .. not modelled in Northern Pas tora l Zone. Less than 0.1 per Cent.

. w a l l mobs may be turned o f f a s they f i n i s h r a the r than .being held over to form a l a rge r mob f o r droving; and

. c a t t l e can be moved through t i c k count ry t o s laughter without the delay of innoculat ion fo r t i c k fever .

Unsealed roads quickly d e t e r i o r a t e wi th use and cause undue bru is ing and dust worry to c a t t l e . Further s ea l i ng o f roads may bene f i t producers, s ince road t r a i n opera tors may charge m r e on unsealed roads because of t he g r ea t e r wear and tear on vehic les (Yeates and Schmidt 1974).

Transport c o s t s form a smaller component of farm cos t s for southern producers than fo r northern producers. This is because i n t e r r eg iona l s tock movements i n southern Aus t r a l i a a r e over much shor te r d i s tances (BAE 1975b3. An increase i n t r anspo r t c o s t s would have a propor t iona te ly g r ea t e r e f f e c t on northern producers than on southern producers.

3.8 Feed to B e e f Conversim R a t i o

Although the r a t i o of e d i b l e meat produced per l ivestock-month of ava i lab le feed may be improved (to a po in t ) simply by increasing t he energy concentrat ion of the feed. t he teem 'conversion r a t i o ' is used here i n the sense o f producing more ed ib l e meat from an ex i s t i ng amount of pasture a t given branding and mor t a l i t y r a t e s . This ,may be achieved by increasing w t p u t per animal o r by reducing feed i n t ake per animal.

The former increases meat output for a given amount of feed bu t has no e f f e c t m stocking capac i ty . The l a t t e r decreases feed input fo r a given amount o f meat output , and so e f f e c t i v e l y increases s tocking capacity.

(a) Feed to beef conversion e f f i c i ency s imula t ions

In Tables 12 and 13, the e f f e c t o f increas ing output per animal by 10 per cen t or reducing feed in take per animal by 10 per cen t is i l l u s t r a t e d . Increased conversion e f f i c i e n c y resu l ted i n increases i n grazing industry n e t income of 8 . 7 p e r cen t and 8 . 9 p e r cen t , respect ively.

In the case of increased o u t p l t per animal, g ross value of output f r a n the c a t t l e e n t e r p r i s e rose, but t h a t frcm sheep f e l l . This probably r e f l ec t ed not only an outward s h i f t i n the f ac to r product curve for t he c a t t l e en t e rp r i s e but a l s o a s h i f t along t h a t curve. This resu l ted i n a t r ans f e r of resources i n t o the c a t t l e en t e rp r i s e .

The g r e a t e s t response i n beef output was i n t he High Ra in fa l l and Wheat-Sheep Zones. This was probably due to both the d i r e c t p roduct iv i ty e f f e c t and the resource t r ans f e r e f f e c t . A smaller response was evident i n t h e Northern P a s t o r a l Zone where, s i nce there were no competing en te rpr i ses , only a d i r e c t p roduc t iv i t y e f f e c t was poss ib le .

I n the case of reduced feed in take per animal, the gross value of ~ t p l t f r m both t he sheep and c a t t l e i n d u s t r i e s increased. This d i f f e r ed from the e a r l i e r case i n t h a t t he increased s tocking capac i ty

Tab le 12 : CHANGE I N INDIVIWAL EWERPRISE GROSS VALUE OF OUTPUT AND TOT= GFIAZING INDUSTRY NET VALUE OF m P U T IN RESPONSE TO 210 PER CENT CRANGES I N BASE LEVEL OF FEED TO BEEF CONVERSION(a) CONCURRENTLY ACROSS ALL RELEVART ZONES

G m s s v a l u e of o u t p u t Net v a l u e of o u t p u t

W o o l Sheep meat T o t a l sheep Beef c a t t l e C m P t o t a l g r a z i n g e n t e r p r i s e e n t e r p r i s e enterprise e n t e r p r i s e e n t e r p r i s e i n d u s t r y

..

High R a i n f a l l c6.0 -4.8 t6.4 -2.1 +6.1 -3.7 -16.4 +18.0 .. . . Wheat-Sheep c4.1 -2.6 +4.1 -1.7 +4 .1 -2.3 -20.9 +21.2 .. . . Sou the rn P a s t o r a l .. -5.6 . . -4.2 .. -5.4 -15.0 +11.7 (b) (b)

Nor the rn P a s t o r a l (b) (b) (b) (b) (b) (b) -10.0 +5.2 (b) ( b )

A u s t r a l i a +3.9 -3.9 +4.7 -2.2 +4.2 -3.4 -16.0 t 13 .6 . . .. -8.2 +8.7

( a ) Meat y i e l d per beef an ima l s o l d . (b) Crop e n t e r p r i s e s n o t modelled i n Sou the rn P a s t o r a l Zone; c r o p and sheep e n t e r p r i s e s n o t model led i n Nor the rn P a s t o r a l Zone. .. Less t h a n 0.1 p e r c e n t .

Table 13: CHANGE I N INDIVIDUAL ENTERPRISE GmSS VALUE OF OUTPUT AND 'iVTAL GRAZING INDUSTRY NET VALUE OF OUTPUT lN RBSPCIUSE TO c10 PER C6W7 CHANGES I N BASE LEVEL OF FEED INTAKE PER BEEF ANlMAL(a) CONCURRENTLY ACROSS ALL RELEVAhT ZONES

Gross value of output N e t value of output

Zone Wml S e e p meat Total sheep Beef c a t t l e crop t o t a l grazing en t e rp r i s e en t e rp r i s e en te rpr i se en te rpr i se en te rpr i se industry

-10% +lox -10% +lox, -10% + r m -10% +lox -10% +lox -10% +lo%

W % % % % a % % % % % % %

,.> - High Rainfal l +3.3 t0.9 t3.7 . . .. +0.7 t3.9 -11.0 .. . . Wheat-Sheep .. +2.4 .. t5.6 +3.5 . . +9.7 -5.7 -0.3 -0.5

Southern Pas tora l -3.7 -1.4 -6.3 -2.1 -3.8 -1.5 . . .. lb) lb)

Northern Pas tora l (b) fb) (b) Ib) Ib) tb) +29.2 -26.9 (b) (b)

Aus t ra l ia tO.5 +1.2 +0.8 t2.4 +O.B +1.6 +11.1 -12.3 -0.2 -0.4 t8.9 -8.5

la) kg of feed consumed per animal run per ha. lb) Crop en t e rp r i s e s not modelled i n Southern Pas tora l Zone; crop and sheep en t e rp r i s e s not modelled i n Northern Pas tora l Zone. .. Less than 0.1 per cent .

was taken up pa r t ly by sheep and p a r t l y by c a t t l e , the r e l a t i v e shares being determined by t he respect ive cons t r a in t s operat ing on each.

(b) Feed t o beef conversion ef f ic iency: research and innovation

When considering ways of increasing feed conversion ef f ic iency , it is important M dis t inguish between r e a l and apparent changes in the r a t e of conversion of avai lable feed t o carcass weight. A r e a l change may be engendered by increasing the e f f i c i ency of digest ion: t h i s w i l l occur regardless of breed. On the other hand, an apparent change may occur simply because the c h a r a c t e r i s t i c s of one breed may be be t t e r su i ted t o one environment than those of another so t h a t , a t i den t i ca l s laughter weights, animals of one breed w i l l have produced the same amount of ed ib le meat for a lower feed i n p l t than those of another.

The primary example of t h i s l a t t e r type of apparent increase in feed conversion has been the infusion of B r i t i s h breed c a t t l e (80s taurus) i n Aus t r a l i a ' s north with Zebu blood (Bos i n d i c u s l . Because of the i r lower metabolic r a t e , B. indicus ccoss c a t t l e survive be t te r and grow f a s t e r i n the northern environment than B r i t i s h breed c a t t l e , the l a t t e r being s t ressed by hea t , poor n u t r i t i o n , p a r a s i t e s and disease (AMRC 1975).

The superior growth and surv iva l of the B. indicus cross-bred therefore a r i s e s from its s u i t a b i l i t y t o the northern environment rather than from a high genetic p o t e n t i a l for growth. Since the main cont r ibutor t o the B. ind icus cross-breds' hea t tolerance - a low metabolic r a t e - a l s o m i l i t a t e s aga ins t s e l ec t ion for high growth r a t e s , it is apparent that no fur ther increase in apparent conversion r a t e can be expected when a l l t rop ica l herds have been upgraPed t o an appropriate degree of B. indicus,

A s imi lar s i t ua t ion e x i s t s with the infusion of European beef breeds - the Charolais, S i m e n t a l , Limousin e t c . - i n t o the Br i t i sh herds of the south. European beef breeds a r e slow-maturing and so are leaner than Br i t i sh c a t t l e a t comparable s laughter weights (Mason 1971). Therefore, a carcass from a European crossbred animal w i l l general ly exh ib i t a higher muscle-to-fat r a t i o than i ts B r i t i s h counterpart and, so, an apparently higher feed conversion r a t i o . A s with B. indicus in the north, scope for fur ther increases in apparent conversion r a t i o w i l l cease when herds i n a r e a s capable of f in ish ing a leaner-type beast have been completely upgraded.

One way of increasing apparent conversion r a t e a t l i t t l e cos t is by the use o f permanent crossing systems. These make use of the f a c t t h a t , a s a r e s u l t of he t e ros i s , f i r s t - c r o s s calves tend t o exhib i t a growth r a t e superior to the average growth r a t e of the two parents. Terminal c ross ing systems using European s i r e s and B r i t i s h dams would take advantage of these breeds' complementary cha rac t e r i s t i c s .

Chemical methods of achieving an increase in r e a l conversion r a t e are a l s o avai lab le . Since pasture forms a d i e t of var iab le a v a i l a b i l i t y and qua l i t y , pasture-fed c a t t l e seldom achieve t h e i r genetic po ten t i a l for growth. However, s t r a t e g i c feeding of supplements can enable c a t t l e to make be t t e r use of ex i s t i ng pasture and, so , d iges t pasture forage more e f f i c i e n t l y . Supplementation with non-protein ni trogen (e.g. urea) can s t imula te the dry-matter intake of c a t t l e on low-protein d i e t s (Condon.

Smith and Winks 1970; Rolroyd, Allen and O'Rourke 1977). Rumensin, a monensin sodium supplement, can increase d iges t ive ef f ic iency by causing a change in ruminal fermentation pa t te rns (Cattleman 1978c,d).

A s imilar increase in conversion e f f i c i ency may r e s u l t from feeding protected pro te in , i .e. p lan t protein which has been processed to pro tec t it from microbial a t tack in the rmen and reticulum. Such pro te in passes, undegraded, through to the abomasum and small i n t e s t ine , where it is digested i n the normal way (Kempton and Leng 1978). Though protected Prote in feeding probably has grea ter p o t e n t i a l for wool production than for meat production, the p o s s i b i l i t y of its use in t he l a t t e r case should not be ruled out. Protect ion of o i l supplements by encapsulation with t reated pro te in produces animal meat low in choles tero l and f a t s containing saturated f a t t y ac ids (CSIRO 1973b). A market could e x i s t among health-conscious consumers foe a product of t h i s type (CSIRO 1 9 7 3 ~ ) .

3.9 Peed to Sheep Neat and Wool Conversion Ratios

fa ) Feed to sheep products conversion ef f ic iency simulations

Australian sheep producers have tended to use breeds of sheep spec ia l i sed toward the production of e i t h e r -01 (Merinos) or meat (other breeds, Merino crosses) . In Tables 14 and 15 the e f f e c t on grazing industry net income of increasing e i the r carcass weight or wool c u t by 1 0 per cent (per livestock-month of feed consumed) is i l l u s t r a t ed . A r i s e i n sheep meat production ef f ic iency resul ted in a r i s e in grazing industry net incane of 4.8 per cent and a r i s e i n wool production ef f ic iency resul ted in an increase of 9.5 per cent . In both cases, a secondary r i s e i n the jo in t product was evident , i .e. a r i s e in sheep meat production ef f ic iency resul ted in increased production of wool as well a s sheep meat.

Where an increase in the feed conversion r a t i o resul ted from a reduction of 10 per cent i n feed intake per animal, grazing industry net income increased by 8.1 per cent (see Table 16) . A s with the case of a reduction i n feed intake per animal i n t he c a t t l e industry (section 3.8), o u t p t from both the sheep and c a t t l e i ndus t r i e s increased. In the sheep industry, both wool and sheep meat production increased and gross value of output from wool rose by 5.8 per cent, a s d id tha t from sheep meat. In absolute terms, a high proportion of t h i s increased output came from the wool a c t i v i t y .

(b) Feed to sheep products conversion ef f ic iency: research and innovation

Feed conversion r a t e s may be increased e i t h e r by genet ic improvement Of exis t ing f locks or by modifying the sheep's d i e t t o el iminate pa r t i cu l a r def ic ienc ies which may be l imit ing.

Genetic improvement to increase apparel wool production from exis t ing Australian breeds is poss ib le , s ince much p o t e n t i a l for improvement remains unexploited. Growth r a t e s and lambing percentages could a l s o be improved by importation of overseas sheep breeds. The Finnsheep, from Scandinavia and the United Kingdom, exh ib i t s high f e r t i l i t y , though it grows slowly and to a m a l l adul t s i ze . The Oxford Down, from the United Kingdom, could contr ibute la rge body s i z e , while the East Fr ies ian , from Europe, a g o d m i l k supply (CSIRO 1974d).

Table 14: CHANGE I N INDIVIDUAL ENTERPRISE GROSS VALUE OF OUTPUT AND TOTAL GRAZING INDUSTRY NET VALUE OF OOTPUT I N RESPONSE TO +_LO PER CENT CHANGES IN BASE LEVEL OF FEED TD SHEEP MEAT CONVERSION (a) CONCURRENTLY ACROSS ALL RELEVANT ZONES

Gross value of output N e t value of output

ZMe Wool Sheep meat Total sheep Beef Ca t t l e Crop t o t a l grazing en t e rp r i s e en te rpr i se en t e rp r i s e en te rpr i se en te rpr i se industry

-10% +lo% -10% +lo% -10% +lo% -10% +lo% -10% +lo% -10% +lo%

W % % % % % % % % % % % % m

High Rainfa l l .. +0.9 -9.7 +9.2 -3.8 +4.5 +1.0 -1.6 . . . . Wheat-Sheep -0.6 +2.9 -10.7 +15.9 -3.9 +7.0 +2.6 -9.3 . . . . Southern Pas to r a l -0.4 -0.5 -16.7 +14.6 -6.1 +2.3 . . .. (b) (b)

Northern Pas to r a l (b) (b) (b) lb) (b) (b) +0.9 +0.9 (b) (b)

Aus t ra l ia -1.1 '+1.5 -10.8 +13.3 -4.2 +5.3 +0.7 -2.8 +0.1 +0.1 -4.2 +4.8

La) Meat y i e ld per sheep sold. (b) Crop en te rpr i ses not modelled i n Southern Pas tora l Zone; c rop and sheep en t e rp r i s e s not modelled i n Northern Pas tora l Zone. .. Less than 0.1 per cent.

Table 15: CHANGE I N INDIVIDUAL EWERPRISE GROSS VALUE OF CUTPUT AND TOTAL GRAZING INWSTRY NET VALUE OF OUTPUT IN RESPCNSE TO +10 PER CENT CHANGES I N BASE LEVEL OF FEEDTOWOOL CONVEFSION(a) CCNCURRENTLY ACROSS - ALL RELWARI ZCNES

Zone

Gross value o f output N e t value of output

Wool Sheep meat Total sheep Beef c a t t l e Crop t o t a l grazing en te rpr i se en te rpr i se en t e rp r j s e en te rpr i se en te rpr i se industry

High Rainfa l l -13.1 +17.3 -2.3 c4.1 -8.9 +12.1 +2.6 -4.7 . . . . Wheat-Sheep -14.6 +13.2 +3.3 +1.3 -8.8 t9.4 +6.6 -6.6 +0.1 -0.3

Southern Pas tora l -16.3 +10.2 -4.2 +2.1 -14.1 +8.7 . . .. (b) (b)

Northern Pas tora l (b) (b) (b) (b) (b) (b) +0.9 +0.9 (b) (b)

Aus t ra l ia -14.5 +13.9 +0.2 +2.6 -9.7 +9.3 3 . -3.8 +0.1 -0.2 -8.9 +9.5

(a) Wool c u t per sheep shorn. (b) Crop en te rpr i ses not modelled i n Southern Pas tora l Zone; crop and sheep en t e rp r i s e s not modelled i n Northern Pas tora l Zone. .. Less than 0.1 per cent.

Table 16: CHANGE I N INDIVIDUAL ENTERPRISE GROSS VALUE OF OUTPUT AND TOTAL GRAZING INDUSTRY NFf VALUE OF OUTPUT I N RESPONSE TO +_I0 PER CEW CHANGES I N BASE LEVEL OF FEED INTAKE PER SHEEP ( a ) CONCURRENTLY ACROSS ALL RELrnArn ZONES

Zone

Gross va lue of o u t p u t Net va lue of o u t p u t

W m l S h e e ~ meat T o t a l sheen Beef c a t t l e Crop t o t a l y r a z i n p .-- e n t e r p r i s e e n t e r p r i s e e n t e r p r i s e e n t e r p r i s e e n t e r p r i s e i n d u s t r y

High R a i n f a l l t6 .6 -3.9 t6 .9 -1.8 +6.7 -3.1 t l . 2 . . . . Wheat-Sheep +6.3 -9.4 +5.2 -7.3 t 5 . 9 -8.7 t 5 . 7 -0.9 -0.7

Sou the rn P a s t o r a l +3.3 -6.5 t4.2 -4.2 +3.4 -6.1 . . (bl (b)

Nor the rn P a s t o r a l (b ) (b) (b) f b) (b) (b) +15.3 -9.9 ( b ) ( b )

A u s t r a l i a t 5 . 8 -7.0 t 5 . 8 -4.6 +5.8 -6.2 t 5 . 5 -3.2 -0.8 -0.6 t 8 . 1 -9.1

( a ) kg o f feed consumed per sheep run per ha. (b) Crop e n t e r p r i s e s n o t modelled i n Southern P a s t o r a l Zone; c r o p and s h e e p e n t e r p r i s e s n o t model led i n Nor thern P a s t o r a l Zone. .. Less t h a n 0.1 p e r c e n t .

Woolless meat producing breeds such a s the oorper (Dorset and Blackhead Persian c ros s ) . Blackhead Persian and Sudan Desert sheep, o f f e r the twin advantages of a r i d cl imate adaptat ion, and reduced costs Of shearing, crutching and f ly - s t r ike control . Since these a r e the type Of

sheep t o which Middle East consumers a r e accustomed, breeds developed from Such bloodlines may have marketing advantages in t ha t region. Fast-growing, lean meat sheep breeds produced from breeds already in Austral ia and New Zealand include the Cormo (Corriedale and Merino cross) and Gromark (Border Leicester and Corriedale c ros s ) .

Genetic s e l ec t ion for wool growth has been car r ied out s ince sheep Were introduced t o Austral ia . The recent introduction of object ive measurement c r i t e r i a i n to wool s a l e s has provided sheep producers with a uniform s e t of c o m e r c i a l l y des i r ab le se lec t ion cha rac t e r i s t i c s . Select ion w i l l be fur ther aided by widespread adoption of performance recording.

Feeding trials indicate t h a t sheep with the heaviest f leeces a re the most e f f i c i e n t feed converters. In t r i a l s a t Armidale, New South Wales, a Merino f lock se lec ted foe high fleece-weight c u t nearly 0.75 kg more clean wool per head a f t e r 5 years than an unselected cont ro l group (Australian Country Magazine 1 9 7 9 ~ ) .

Breeding of sheep with the type of s p e c i a l i s t -1s which Austral ia cur rent ly imports (such a s carpe t wools) w i l l be accelerated by the recent developnent of Drysdale and Scot t i sh Blackface flocks. Carpet-wool breeds adapted to dry t rop ica l regions could a l s o boost wool production from the semi-arid regions of Austral ia . These breeds include the Awassi (Eastern Mediterranean), t he Bakhtiar i ( I r an ) , and the Bikaneri (India) (CSIRO 19744). However. i n New Zealand, where the Drysdale was developed, the resurgence of the wool market has generated renewed i n t e r e s t i n all-purpose breeds such a s the Ranney (Graham 1979).

Ways of modifying the d i e t of sheep t o overcane pa r t i cu l a r nu t r i t i ona l def ic ienc ies include:

. lupin or g ra in supplementation for pregnant ewes grazing low-protein roughage;

. feeding protected pro te in (where p ro t e in deficiency is l imi t ing growth) to increase growth ra tes ; and

sulphur supplementation in sulphur-deficient d i e t s such a s spear g ra s s (CSIW) 1972b).

Sulphur is used in the u t i l i s a t i o n of roughage in the rumen, but a l so needs to be absorbed separately in the m a l l i n t e s t i n e fo r use in wool growth. Supplementing the d i e t with sulphur of ten f a i l s because of degradation i n the rumen. For ex t r a wool growth, sulphur may need to be fed i n a protected form.

Other methods of increasing feed conversion ef f ic iency include:

. subcutaneous implantation of tes tos terone propionate p e l l e t s , which . i x r e a s e bath meat and m o l production;

a r t i f i c i a l induction of cryptorchidism ( t e s t i c l e re ten t ion) i n the male sheep. Increased weight-gain r a t e s allow lambs to be turned o f f a t younger ages. Also, the s l i g h t l y bland t a s t e could make the meat more acceptable to the Middle-East trade.

3.10 L a d i n g Rates

Lambing r a t e s (percentage of lambs marked to ewes mated) vary markedly between production zones. Most of t h i s var ia t ion can be traced t o the influence of climate. In 1976-77, lambing r a t e s ranged from 55 per cent i n the Pas tora l Zone t o 68 per cent and 79 per cent in the Wheat-Sheep and High RainfaLl Zones. respect ively. The average for the grazing industry as a whole was 69 per cent (see Table 17).

(a) Sheep reproduction ef f ic iency simulations

The impact of grea ter reproductive ef f ic iency in the sheep sector of the Australian grazing industry was simulated by increasing lamb marking percentages by 10 per cent concurrently across a l l relevant zones. This resu l ted in an increase i n grazing industry net income by 3.5 per cent (see Table 18). This was due mainly t o increased output from the sheep

meat and c a t t l e a c t i v i t i e s . A t a zonal l eve l , an increase i n sheep reproduction r a t e s resul ted in a t ransfer of resources f r m the w w l en terpr i se of the Wheat-Sheep Zone and the sheep meat en terpr i se of the High Rainfa l l Zone to the remaining sheep enterpr i ses , and to the beef c a t t l e en terpr i se of the Wheat-Sheep Zone.

(b) Lambing rates: research and innovation

Lambing r a t e s can be increased e i t h e r by breed improvement or by b e t t e r flock management. An a l t e r n a t i v e to the t r ad i t i ona l stud-based breeding system is the system of 'group breeding', which involves each p r q c e r par t ic ipa t ing i n the scheme se lec t ing h i s bes t ewes and rams for a cen t r a l breeding f lock. The bes t lambs from the c e n t r a l flock are retained for fu ture breeding. Lambs surplus to the c e n t r a l f lock ' s requirement are returned t o individual f locks, thus increasing the genetic qua l i t y of these flocks. Genetic po ten t i a l w i l l increase more rapidly than i f individual producers breed and s e l e c t only from t h e i r own flocks.

Select ion c r i t e r i a w i l l vary according t o producer requirements. For example, se lec t ion for f e r t i l i t y (through eas ier lambing, or twinning) may have adverse e f f e c t s on surv iva l o r w i g h t gain through t o weaning. A w w l producer may be more concerned with the number of lambs surviving t o weaning. However, a fat-lamb producer may be more concerned with maximising meat production per hectare than with increasing the number of lambs dropped.

O f spec ia l i n t e r e s t has been the development by CSIRO, s ince the ea r ly 1950s, of the Boormla, a s t r a i n of high-fecundity medium-ww1 Merino. In t r i a l s using rams from a flock of pure-bred Booroola ewes transferred t o Western Austral ia i n 1969, Boorwla-Western Austral ian Peppin cross ewes produced an average of 1.54 lambs per ewe mated, compared with 0.92 lambs per ewe mated from Western Austral ian Peppin sheep (CSIRO 19786).

Table 17: LAMBING(a) AND BRRNDING(b) RATES CN AUSTRALIAN GRAZING INDUSTRY PROPERTIES: BY ENTERPRISE TYPE, ZCNE AND AUSTRALIA: 1976-77: Average per property

Sheep dominant(d) Beef dominantle) Total Australian grazing industry(f)

Lambing r a t e Branding r a t e Lambing r a t e Branding r a t e

High Rainfal l

Wheat-Sheep

Pastoral

Australia

(a1 Lambs marked per ewes mated. (b) Calves branded per cows mated. (cl A s defined for BAE AGIS. (d) Devoting more than 75 per cent of land area to sheep grazing. (e) Devoting more than 75 per cent of land area to beef c a t t l e grazing. ( f ) Includes sheep dominant, c a t t l e dominant, crop dominant, sheep oriented, beef oriented, crop oriented and mixed.

Table 18: CHANGE I N INDIVIDUAL ENTERPRISE GROSS VALUE OF CUTPUT AND TOTAL GRAZING INDUSTRY NET VALUE OF OUTPUT IN RESPONSE TO 210 PER CEKf CHANGES I N BASE LEVEL OF LAMB MARKING RATE(a) CCNCURRENTLY ACROSS ALL RELNAKf Z O N E

Gross value of output N e t value of output

Wool Sheep meat Total sheep Beef c a t t l e Crop t o t a l grazing en t e rp r i s e en t e rp r i s e en te rpr i se en t e rp r i s e enterprise industry

-10% +lo% -10% +lo% -10% +1OX -104 +lo% -10% +lo% -10% +lox

% a B a a 8 % % 8 t % % ,b ,.J

High Rainfa l l +9.6 +1.8 +2.8 -1.8 +6.9 +0.4 -8.6 -0.5 .. . . Wheat-Sheep .. -4.5 -16.0 +25.3 -5.1 +5.1 +7.6 +30.3 -0.3 +0.1

Southern Pas to r a l -6.5 .. -27.5 +22.9 -10.3 +4.2 . . . . (b) (bl

Northern Pas tora l (b) (b) (bl (b) (b) (b) f b) (b) (b) (b)

Aus t ra l ia +1.7 -1.5 -8.8 +13.3 -1.7 +3.3 -2.5 +7.0 .. +0.2 -4.6 +3.5

(a) Lambs marked t o ewes mated. (b) Crop en t e rp r i s e s not modelled i n Southern Pas tora l Zone: crop and sheep en t e rp r i s e s not modelled i n Northern Pas tora l Zone. .. Less than 0.1 per cent.

Bmroolas have been exported t o New Zealand since 1972. In breeding t r i a l s a t S w t h Island research s t a t i o n s , Booroola c ros s ewes have demonstrated lower barrenness than Merino ewes and have produced nearly 50 per cent more lambs (Australian Country Magazine 1979d).

Management s t r a t e g i e s t o improve lambing r a t e s may be divided in to those which modify the stieep and those which modify the environment i n which lambing takes place. Tra examples of b io logica l adjustment are the mating of ewes a t h i g h ~ b o d y weight (to increase conception r a t e s ) and synchronisation of oes t rus with progesterone-impregnated pessar ies (so a l l ewes w i l l lamb around the same time). The l a t t e r has the advantage of reducing labour input i f lambing is supervised. It a l s o f a c i l i t a t e s the use of d r i f t lambing, which reduces the kidnapping of newly born lambs by pa r tu r i en t ewes. There may, however, be a grea ter r i sk of high lo s ses in adverse weather condit ions due t o the concentration of lambing over a short time.

Modifications to the environment i n which lambing and growth t o weaning occurs may take various forms, e.g. the provision of s h e l t e r b e l t s in the form of t r e e s and hay-breaks cu t in t a l l standing grass or crops.

3.11 Branding Rates

A s with lambing r a t e s , branding r a t e s (calves branded t o mws mated) a re influenced by cl imate, through nu t r i t i on . In 1976-77, branding r a t e s varied from 64 per cent i n the Pas tora l Zone to 84 per cent and 81 per cent i n the Wheat-Sheep and High Ra in fa l l Zones, respect ively. The average branding r a t e for a l l grazing industry proper t ies was 75 per cent (see Table 17 ) .

(a) C a t t l e r e ~ r o d u c t i v e ef f ic iency simulations

The impact of grea ter reproductive ef f ic iency in the beef sector of the Australian grazing industry was simulated by increasing ca l f branding percentages by 10 per cent concurrently across a l l relevant zones. This resul ted i n an increase i n grazing industry net income of 5.6 per cent (see Table 19 ) . Output £ran the beef industry rose by 1 2 per cent , while t h a t from the sheep industry f e l l by 3 per cent . Within the beef industry, w t p u t response was g r e a t e s t i n t he Wheat-Sheep Zone and l e a s t i n the Northern Pas tora l Zone - again r e f l ec t ing the number of competing enterpr i ses from which the beef industry w a s able t o a t t r a c t resources.

lb) Branding r a t e s : research and innovation

Probably the g rea t e s t scope fo r improving branding r a t e s i n extensive c a t t l e production systems l i e s with the adoption of such well-accepted management s t r a t e g i e s a s control led mating and control led weaning. Combined with s t r a t e g i c pro te in and phosphorus supplementation, these have resul ted in s ign i f i can t increases in branding r a t e s on sane northern propert ies .

I n the more intensive production systems, scope e x i s t s for increasing branding r a t e s through a r t i f i c i a l insemination. While a r t i f i c i a l insemination i n beef herds may never achieve the wide appl ica t ion it has in dairying, synchronisa t im of oes t rus (enabling quick insemination of

Table 19: CRANGE I N INDIVIDUAL EWERPRISE GROSS VALUE OF OUTPUT AND TGTAL GRRZING INWSTRY NEF VALUE OF OUTPUT M RESPONSE TO +10 PER CENT CHANGES M BASE LEVEL OF CALF BRANDING RATE(a) CCNCURRENTLY ACROSS ALL RELEVANT ZONFS

Gross value of output N e t value of output

zone wool Sheep mat Total sheep Beef c a t t l e Crop t o t a l grazing

en t e rp r i s e en t e rp r i s e en t e rp r i s e en t e rp r i s e en t e rp r i s e industry

Bigh Rainfa l l +4.2 -3.3 +4.7 -1.6 +4.4 -2.6 -13.0 +11.2 . . . . Wheat-Sheep +3.1 -3.1 +1.1 -1.7 r2.4 -2.6 -18.1 +21.2 +0.3 -0.3

Southern Pas to r a l +0.5 -6.1 . . -4.2 +0.5 -5.7 . . . . (b) (b)

Northern Pas tora l (b) (b) (b) (b) (b) (b) (b) (b) (b) (b)

Aus t ra l ia +2.9 -3.7 +2.6 -1.9 +2.8 -3.1 -12.3 +12.1 +0.3 -0.2 -5.5 c5.6

(a) Calves branded per cows mated. (b) Crop en te rpr i ses not mcdelled i n Southern Pas tora l Zone; crop and sheep en t e rp r i s e s not modelled i n Northern Pas tora l Zone. .. Less than 0.1 per cent.

large batches of cows) could make a r t i f i c i a l insemination i n beef herds a more comnercial proposition. In the USA, synchronisation of OeStrUS using p l a s t i c implants containing hormones (which avoids the need for heat detect ion) has resul ted in a reduction of the breeding period, be t te r breeder management during t h i s period, and increased concentration in subsequent calving pat terns.

Viewed a s a long-term investment, oes t rus synchronisation and a r t i f i c i a l insemination beef herds may prove advantageous in production systems where c a t t l e a re handled regularly.

Cat t le twinning is another deve lopen t wiUl m e scope for ra i s ing branding r a t e s i n some southern areas (CSIRO 1974e).

3.12 Sheep and C a t t l e Mortal i ty Rates

(a) Cost to the qrazinq industry

In 1975-76, there were an estimated 13 mi l l ion sheep and 1.47 mi l l ion c a t t l e (beef and dairy) deaths on grazing industry propert ies . A t the average value of stock traded during 1975-76, t h i s would represent losses to the industry of the order of $ E l m and $84m, respect ively. This is probably an underestimate of true value, because more stock are traded for slaughter than for breeding, or ' i n wool'. Although some stock lo s s is unavoidable (through drought. f i r e and flood etc.1 , disease control , be t te r nu t r i t i on , and hardier stock could a l l reduce mor ta l i ty r a t e s t o m e extent.

(b) Mortal i tv r a t e reduction

The occurrence of drought, f i r e and flood is beyond 'the cont ro l of the individual producer. However, animal heal th and disease a l so exer t some influence on mor ta l i ty ra tes . Stock deaths may occur d i r e c t l y through infec t ious diseases, p lant poisoning or metabolic disorder , or indi rec t ly a s a r e s u l t of poor condition brought about by paras i tes , inf e c t i m s d iseases or nu t r i t i ona l def ic ienc ies . Venereal diseases, i n par t icu lar , may depress conception r a t e s or increase the incidence of abortion and pre-natal deaths.

Options ava i lab le for the cont ro l of pa ra s i t e s , infec t ious diseases and nu t r i t i ona l def ic ienc ies have been discussed in previous sect ions. Correction of these and of t race mineral def ic ienc ies has, i n some cases, required unique solut ions, e.g. the administrat ion of a cobal t ' bu l l e t ' t o prevent poor calf-growth and muscular dystrophy in c a t t l e i n wbal t -def ic ien t areas.

4. Discussion of Results 1 '. The r e su l t s i n Table 2 indicate t h a t grazing industry net income

appears most s ens i t i ve to changes in feed supply, labour requirements and feed conversion eff iciency. Although these r e s u l t s represent only a

I f i r s t s tep in the research evaluation process, they still can be interpreted, a s they stand, a s broad indica tors of l i k e l y areas of

I productivity gain. Of course, for a m p l e t e cost-benefi t analysis , the research and applicat ion costs associated with each productivi ty gain

would need t o be calculated. Ccanparison of each s t ra tegy would then be poss ib le on the bas is of discounted cash flow, i.e. net present value.

For example; i f b io logica l con t ro l of the sheep blowfly were expected to reduce labour cos t . to the indus t ry by 1.8 per cent , then it is poss ib le to ca l cu la t e , given the information i n Table 2, t h a t such a change could increase grazing industry ne t incane by 2 per cent , or some $23m i n 1976-77 terms. Therefore, a discounted cash flow ( i . e . gross bene f i t ) fo r t h i s p ro j ec t could be calculated. I f the discounted c o s t s of the pro jec t (e.g. the costs of breeding and spreading f l i e s with a condit ional ly l e t h a l gene) were less than the gross benef i t , the p ro j ec t would be cost-effect ive.

The d e s i r a b i l i t y of proceeding with any pro jec t , however, w u l d depend on current l imi ta t ions on funds and whether or not other p ro j ec t s may y i e ld higher net returns. ( 4 )

However, i den t i f i ca t ion of the n e t benefi t expected from each productivi ty change would permit research p ro j ec t s t o be ranked according t o p o t e n t i a l pay-off. I f research funds were al located accordingly, o v e r a l l re turn from investment i n research would be maximised ex ante.

h addit ion to providing an est imate of the annual gross benef i t of var ious productivi ty gains, the model r e s u l t s may be used t o iden t i fy the l i ke ly d i s t r i bu t ion of the bene f i t s . For example, the model r e s u l t s suggest t h a t . a reduction i n wool s e l l i n g cos t s (see Table 10) could r e s u l t in a s l i g h t expansim of output f ran the wool en terpr i ses of the High Rainfa l l and Wheat-Sheep Zones and a contraction of output i n the beef en t e rp r i se of the Wheat-Sheep Zone. By cont ras t , an increase in the feed t o -1 conversion r a t i o (see Table 15) could r e s u l t i n output increases i n both the wool and sheep meat en terpr i ses across a l l zones, thus benefi t ing a grea ter number of producers.

( 4 ) Also. i n most cases i n addit ion t o the basic research cost, there is the c o s t of implementing the new technology on the farm. For exam~le . s w ~ l e m e n t i n s the d i e t of ruminants with s u l ~ h u r would - . - - require a continuing purchase of sulphur. This cos t a l s o would need to be subtracted from grazing indus t ry net income (Table 2) before a net benef i t could be calculated.

Appendix A

MATHEMATICAL FORNUIATION OF THB REGIONAL PWXiRAMMING MODEL

The Regional Programming Model (RPM) is a l i n e a r programming model developed within t h e snE for use in a wide range of research pro jec ts examining adjustment processes i n the Austral ian grazing industry (Longmire e t al. 1979). Thirteen production regions are defined to allow fo r the d i f ferences i n production environments. The model maximises an object ive function of ne t incane to the na t ional grazing industry subjec t to a s e r i e s of resource and behavioural cons t ra in ts . This object ive function can be described by the following mathematical form:

i (ne t incane) = (gross revenue) - (var iab le cos t s ) - (f ixed cos ts )

which is maximised subject t o rn cons t r a in t s of both a regional and nat ional nature. Constraints a f f ec t ing a c t i v i t i e s or resource usage a t a regional l e v e l can be expressed i n the general form;

C (2) (i) bik < . a , . 3 l ] k - x j k *

when the cons t r a in t spec i f i e s the minimum

th usage of t he ith resource i n the k region; o r

C (ii) bik ) . a . l,k . . x jk, when the cons t r a in t s p e c i f i e s t he maximum 3

usage of t he ith resource i n the kth region.

while the cons t r a in t s a f fec t ing the a c t i v i t i e s or resource usage a t the nat ional l eve l can be expressed i n the general form;

C z (3) (i) bi \ , aijk . xjk and

(ii) xjk> 0 , j = l,...,n, k = 1,...,13

where

NY = gross revenue l e s s var iab le and f ixed costs

k = 1,. . . ,13 a r e the subregions i n the model

P. = u n i t gross revenue of j t h a c t i v i t y i n t h e kth region 3k

j = l , . . . ,n i nd ica t e s the f u l l range of a c t i v i t i e s i n t he

f model 6

' jk = the l e v e l of t he j t h a c t i v i t y i n the kth region i n

the optimal so lu t ion

V . = the u n i t var iab le c o s t of the jth a c t i v i t y i n the 3k

kth region

F = fixed cos t s associated with production in the kth k

region.

a i j k = the mount of the ith resource required by the

jth a c t i v i t y i n the kth region

b i k = the cons t r a in t a f f ec t ing the ith resource i n the

kth region.

A range of a c t i v i t i e s representing the main en te rp r i se options ava i lab le to producers i n each region are specif ied in the regional submatrices. These include: feed supply, cropping, sheep, beef c a t t l e , labour, c a p i t a l and investment, and commodity s a l e s and input purchases.

Coefficient values for a c t i v i t i e s have been appropriately specif ied for condit ions in each region. Agr icul tura l production within the model is generated a t the regional l e v e l with the submatrices being linked by a s e r i e s of in ter regional t ransfer a c t i v i t i e s .

The bi values from equation 3 represent cons t ra in ts which define the amount of each resource avai lab le to the production a c t i v i t i e s . Additional cons t ra in ts (equation 2 ) operate on each regional resource leve l . These ' f l e x i b i l i t y cons t r a in t s ' r e s t r i c t adjustments i n a c t i v i t y l e v e l s to within f eas ib l e upper and lower bounds, cons is ten t with the time period simulated.

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