Better use of rainfall a key to improving profits

26 Apr, 2010 11:40 AM
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It will come as no surprise to Western Australian grain growers that wheat yield is the greatest driver of farm profitability, and winter rainfall has the biggest influence on wheat yields.

But while growers cannot increase their rainfall unless they change locations, there are many management opportunities for improving their use of available rainfall and therefore profits.

These are findings from Grains Research and Development Corporation (GRDC) funded work exploring the link between ‘water use efficiency’ (WUE) and farm profitability through an analysis of farm business data collected from about 400 clients of farm consulting firm Planfarm.

WUE refers to the amount of grain produced from a given amount of rainfall, and is affected by practices used by growers.

The research work is part of the GRDC funded project, hosted by CSIRO, ‘Increasing water use efficiency in the northern sandplain region of WA’.

GRDC western panel chairman Neil Young said optimising the use of available rainfall is a key research and development priority identified by Australian grain growers and the analysis of Planfarm data is an example of current GRDC investment in this area.

Peter Tozer, of PRT Consulting, analysed Planfarm client data collected from 2003 to 2007 and found winter rainfall, followed by summer rainfall, how efficiently a farmer uses that rainfall, and then nitrogen rates, were the biggest drivers of wheat yields.

The analysis indicated most growers could improve their profitability, with the average efficiency of use of all inputs being 77 per cent.

This means producers could have, on average, improved their output using the same level of inputs by 23 per cent compared with the most efficient producers surveyed.

Other factors which had a significant impact on operating surplus in at least three out of the five years included operating costs, with analysis showing there is an optimal level of operating expenditure for inputs, and reducing some inputs can actually reduce profits.

The percentage of crop on a farm was shown to be critical in maximising profitability and the data suggested the optimal level of crop on farmland was more than 80 per cent across all rainfall zones.

Machinery capacity had a significant impact on profitability, with greater capacity allowing critical operations such as seeding to be conducted on time. However, the analysis also showed excess capacity could be an added cost.

Planfarm consultant Cameron Weeks said maximising grain production from rainfall is critical to maximising farm profits and can be influenced by agronomic and non-agronomic management opportunities.

Mr Weeks said while CSIRO is investigating agronomic factors which affect WUE, Planfarm is now surveying clients to gain a better understanding of non-agronomic factors that might influence grain production from available rainfall.

“A common assumption is that WUE is all about agronomy, but our best performing farmers also do other things very well including their approach to labour, debt, seeding, plant investment decisions, and use of GPS technology, farm advisers and seasonal forecasts,” Mr Weeks said.

“This survey of non-agronomic factors affecting WUE, collected from 2008, 2009 and 2010, will also be analysed by PRT Consulting.”

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