Weathering the weatherFinancial and production analysis for three Victorian farms                                   Harm v...
Nine consecutive yearswith decile 3 or less rainfall             to decile 10 with the wettest     harvest on record(Nov t...
Discussion topics• Comparison of three farms in the Mallee, southern  Mallee and Wimmera• Importance of bio-physical const...
Bio-physical constraints(i) Rainfall                                            Birchip annual rainfall (1891 to 2010) (av...
(ii) Soils                     • Mallee clay loam                     • pH alkaline   Southern Mallee   • Subsoil high in ...
Mallee farm background• No-Till operation since 2003 (sold all livestock)• 100% crop – wheat, barley, canola, pulse crops•...
Southern Mallee farm background                                      • 2000 ewes - self replacing flock                   ...
Wimmera farm background• Mainly No-till• Chickpeas, lentils, canola,  wheat, and barley• Export oaten hay
Farm production• Nineteen years data• Farm size• Paddock rotation• Production (yield and protein)• Inputs such as fertilis...
Farm financialsINCOME• Crop and livestockCOSTS• Inputs (chemicals, fertiliser, seed, sheep  husbandry, rates, office, insu...
Southern Mallee Farm - area (ha)            5000            4000Area (ha)            3000            2000            1000 ...
Historical production                     Sth Mallee Farm Cereal yield               4.0               3.5                ...
Yield and Rainfall
Income and Costs                                    Southern Mallee Farm – Farm income and expenses ($/ha)                ...
Southern Mallee Farm                                            - expenses as % of total costs                            ...
Livestock on the southern Mallee farm                                  Sth Mallee Farm - cash margin for crop and sheep ($...
Southern Mallee Farm Profit                            250                            200                            150Fa...
Sth Mallee Farm - Farm Profit vs Growing Season Rainfall                         250                                      ...
Cumulative profit for the Mallee, southern Mallee and Wimmera                                                             ...
Risk management• The three farms are well managed (financially  and agronomically)• For crop production the Southern Malle...
Farm profit efficiency                           Farm profit (excl. tax and interest) in relation to rainfall and the pric...
Main messages• Understand the bio-physical constraints of the  enterprise• Have a good grasp of the financial situation• C...
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Harm van Ree's presentation to Climate Champions at the National Workshop, Adelaide 2011

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Harm van Rees is a consultant from the Birchup Cropping Group, Victoria. Harm was invited to give a talk to the Climate Champions during the February Climate Champions National Workshop held in Adelaide, 2011.

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  • The following two videos are of Harm giving his presentation to the Climate Champion group during the National Workshop, held in Adelaide, 2011.


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Harm van Ree's presentation to Climate Champions at the National Workshop, Adelaide 2011

  1. 1. Weathering the weatherFinancial and production analysis for three Victorian farms Harm van Rees, Brooke White Cropfacts P/L
  2. 2. Nine consecutive yearswith decile 3 or less rainfall to decile 10 with the wettest harvest on record(Nov to Jan rainfall - 330mm)
  3. 3. Discussion topics• Comparison of three farms in the Mallee, southern Mallee and Wimmera• Importance of bio-physical constraints• Impact of the Millennium drought• Long term production and financials - profit• Risk management
  4. 4. Bio-physical constraints(i) Rainfall Birchip annual rainfall (1891 to 2010) (average = 365mm) 800 Annual rainfall 700 5 year running mean 600 Millennium Federation drought WWII drought droughtRainfall (mm) 500 400 300 200 100 0 Multiple year drought Single year drought
  5. 5. (ii) Soils • Mallee clay loam • pH alkaline Southern Mallee • Subsoil high in EC, chloride and boron • Rooting depth: 60 to 80cm • Available soil water: 80mm
  6. 6. Mallee farm background• No-Till operation since 2003 (sold all livestock)• 100% crop – wheat, barley, canola, pulse crops• All stubbles retained• Precision seeding• Liquid and solid fertiliser application at seeding
  7. 7. Southern Mallee farm background • 2000 ewes - self replacing flock • Stocking rate - 3 DSE/ha • Feedlot as containment area and for finishing lambs• Change over to No-Till• Precision seeding• 70% - wheat and barley• 30% - pasture / chemical fallow• Occasionally a paddock of lentils
  8. 8. Wimmera farm background• Mainly No-till• Chickpeas, lentils, canola, wheat, and barley• Export oaten hay
  9. 9. Farm production• Nineteen years data• Farm size• Paddock rotation• Production (yield and protein)• Inputs such as fertilisers and herbicides• Management practices
  10. 10. Farm financialsINCOME• Crop and livestockCOSTS• Inputs (chemicals, fertiliser, seed, sheep husbandry, rates, office, insurance)• Machinery (depreciation, fuel, freight, repairs, contractors)• Finance (land rent, machinery, interest)• Labour (owner drawings, employees)
  11. 11. Southern Mallee Farm - area (ha) 5000 4000Area (ha) 3000 2000 1000 0
  12. 12. Historical production Sth Mallee Farm Cereal yield 4.0 3.5 Cereal yield Cereal 3yr ave 3.0Yield (t/ha) 2.5 2.0 1.5 1.0 0.5 0.0
  13. 13. Yield and Rainfall
  14. 14. Income and Costs Southern Mallee Farm – Farm income and expenses ($/ha) 450 Farm income 400 Farm expensesFarm income/expenses ($/ha) 350 300 250 200 150 100 50 0
  15. 15. Southern Mallee Farm - expenses as % of total costs Farm inputs Machinery 50 Labour Finance 40Expenses (% of total costs) 30 20 10 0 Benchmarks: Inputs 35%; Machinery 35%; Labour 15%; Finance 15%
  16. 16. Livestock on the southern Mallee farm Sth Mallee Farm - cash margin for crop and sheep ($/ha) 400 300cash margin $/ha 200 100 0 -100 crop sheep -200
  17. 17. Southern Mallee Farm Profit 250 200 150Farm Profit / Loss ($/ha) 100 50 0 -50 -100 -150 -200
  18. 18. Sth Mallee Farm - Farm Profit vs Growing Season Rainfall 250 450 200 400 150 350Farm Profit / Loss ($) 100 Decile 3-4 300 GSR (mm) 50 250 0 200 -50 150 -100 100 Farm profit ($/ha) -150 50 GSR -200 0
  19. 19. Cumulative profit for the Mallee, southern Mallee and Wimmera farms 2,000,000 Mallee Southern MalleeCumulative farm earnings ($) 1,500,000 Wimmera 1,000,000 500,000 0 -500,000
  20. 20. Risk management• The three farms are well managed (financially and agronomically)• For crop production the Southern Mallee farm needs a decile 3 to 4 to break even; the Mallee and Wimmera farms a decile 2 (assuming average price)• Livestock or another source of income, other than crops, is essential for the Southern Mallee farm• 100% crop makes any enterprise vulnerable to a single frost or heat event; rain at harvest; poor price; crop disease etc.
  21. 21. Farm profit efficiency Farm profit (excl. tax and interest) in relation to rainfall and the price of wheat 500 400 300EBIT ($/ha) 200 100 0 -100 -200 200 300 400 500 600 700 Growing season rainfall plus on-farm wheat price Profit ($/ha) = 2 x (GSR + Price of wheat – 350)
  22. 22. Main messages• Understand the bio-physical constraints of the enterprise• Have a good grasp of the financial situation• Consider the operators skill and capability• Owner’s attitude towards risk• Availability of labour• Priorities for family and lifestyle

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