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Farmers adapting to climate changeFinancial and production analysis for three Victorian farms    Harm van Rees, Alexandra ...
• 2001 to 2009 - drought years• 2010 - decile 10 with  wettest harvest on record  (330mm)
Discussion topics• Southern Mallee farm (Victoria)• Long term production and financials analysis• Importance of bio-physic...
Southern Mallee farm background                                    • 2000 ewes - self replacing flock                     ...
Bio-physical constraints                Soils                        Agronomic• pH alkaline                        • Weeds...
Farm financialsINCOME• Crop and livestockCOSTS• Inputs (chemicals, fertiliser, seed, sheep  husbandry, rates, office, insu...
Historical production                     Sth Mallee Farm Cereal yield               4.0                                  ...
Income and Costs                                    Southern Mallee Farm – Farm income and expenses ($/ha)                ...
Southern Mallee Farm                                        expenses as % of total costs                                  ...
Farm Profit vs Growing Season Rainfall                         250                                                  450   ...
Cumulative profit for the Mallee,                                    southern Mallee and Wimmera farms                    ...
Risk assessment• Crop production - Southern Mallee farm  needs a decile 3 to 4 to break-even; the  Mallee and Wimmera farm...
Main messages• Understand the bio-physical constraints of the  enterprise• Have a good grasp of the financial situation• C...
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Farmers adapting to climate change: financial and production analysis for three Victorian farms - Harm van Rees

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Farmers adapting to climate change: financial and production analysis for three Victorian farms - Harm van Rees

  1. 1. Farmers adapting to climate changeFinancial and production analysis for three Victorian farms Harm van Rees, Alexandra Gartmann, Brooke White, James Laidlaw for the BCG
  2. 2. • 2001 to 2009 - drought years• 2010 - decile 10 with wettest harvest on record (330mm)
  3. 3. Discussion topics• Southern Mallee farm (Victoria)• Long term production and financials analysis• Importance of bio-physical constraints• Impact of the Millennium drought• Risk management
  4. 4. Southern Mallee farm background • 2000 ewes - self replacing flock • Stocking rate - 3 DSE/ha • Feedlot• Change over to No-Till• Precision seeding• 70% - wheat and barley• 30% - pasture / chemical fallow• Occasional paddock of lentils
  5. 5. Bio-physical constraints Soils Agronomic• pH alkaline • Weeds• Subsoil high in EC, chloride and • Herbicide resistance boron • Crop diseases• Rooting depth: 60 to 80cm • Soil less suitable to canola and• Available soil water: 80mm pulses
  6. 6. 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)
  7. 7. Historical production Sth Mallee Farm Cereal yield 4.0 Cereal yield 3.5 Cereal 3yr ave 3.0Yield (t/ha) 2.5 2.0 1.5 1.0 0.5 0.0
  8. 8. 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
  9. 9. 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%
  10. 10. 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
  11. 11. 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
  12. 12. Risk assessment• Crop production - 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 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.
  13. 13. 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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