The document describes using a whole-farm optimization model called MIDAS to evaluate the profitability and environmental impacts of incorporating forage shrubs into a typical 3000 hectare crop-livestock farm in Australia's low rainfall Mallee region. The model simulates over 200 crop-pasture rotations across 7 different land management units and considers interactions between enterprises. Model results show that incorporating up to 10% forage shrubs has little impact on whole-farm profit, but above 10% profit sharply declines. Higher shrub biomass production and nutrient levels increase potential profitability. Changes to commodity prices also impact the optimal shrub allocation.

1. Identifying the fit for perennial forage options
in a crop-livestock system: use of a whole-
farm optimization model
Marta Monjardino,
R. Llewellyn and A. Bathgate
5th World Congress of Conservation Agriculture
Brisbane, 26-29 September 2011

2. Background
• Major economic and environmental challenges in low rainfall
zones of southern Australia;
• Forage shrubs may help fill the long feed gap in the Mallee and
provide other benefits;
• But are they profitable?
• Use of a bio-economic tool to help identify where in the
landscape and at what level of production/quality they might be
profitable.
CSIRO. Identifying the fit for forage shrubs in a crop-livestock system: use of a whole-farm optimization model

3. Background
• Major economic and environmental challenges in low rainfall
zones of southern Australia;
• Forage shrubs may help fill the long feed gap in the Mallee and
provide other benefits;
• But are they profitable?
• Use of a bio-economic tool to help identify where in the
landscape and at what level of production/quality they might be
profitable.
CSIRO. Identifying the fit for forage shrubs in a crop-livestock system: use of a whole-farm optimization model

4. Forage shrubs in the Mallee
• Old Man Saltbush (Atriplex nummularia) the most widely
available commercial shrub species;
• Low % of farmers adopting shrubs and only <1% of farm area
with shrub plantings due to relatively low quality/production;
• Opportunities to identify/develop new OMS and other shrub
types, arrangements and mixes for higher performance;
• Whole-farm model needed as perennials will always be a niche
land area, but have whole-farm impact via livestock, etc;
• Whole-farm considerations to help shape R&D strategies.
CSIRO. Identifying the fit for forage shrubs in a crop-livestock system: use of a whole-farm optimization model

5. MIDAS
• Model of an Integrated Dryland Agricultural System;
• Whole-farm optimization model;
• Based on LP technique;
• Deterministic model;
• Annual equilibrium structure;
• Interactions between enterprises;
• Thousands of input parameters;
• Detailed model output;
• Software: EXCEL spreadsheets + LINDO algorithm;
• Good coverage of southern Australia agro-ecological regions
with several model versions in 4 states.
CSIRO. Identifying the fit for forage shrubs in a crop-livestock system: use of a whole-farm optimization model

6. Mallee MIDAS overview
• Typical 3000 ha crop/livestock farm;
• Average annual rainfall: 250-350 mm (80% in winter);
• Average summer max daily temp. >30ºC;
• 7 LMUs with ≠ prod. potential in typical dune-swale land system;
• Crops: wheat, barley, triticale, canola, lupins, range of legumes;
• Options for fallow and cereal grazing;
• Merino/crossbred sheep dominant livestock for wool and meat;
• Grazing on annual (medic), perennial (lucerne), vol. pastures;
• Woody perennial options: forage shrubs, tree alleys;
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CSIRO. Identifying the fit for forage shrubs in a crop-livestock system: use of a whole-farm optimization model

7. Mallee MIDAS overview
• Over 200 crop-pasture rotations + inter-rotational effects;
• Ten pasture growing periods/year;
• Ten major feeding periods/year;
• Five supplementary feeding options;
• Over 80 sheep classes;
• Different management options/class;
• Different energy and intake volume/class;
• Deferment of pasture grazing between growing periods, and
degeneration of feed over summer;
CSIRO. Identifying the fit for forage shrubs in a crop-livestock system: use of a whole-farm optimization model

8. Mallee MIDAS overview
• Several grain, stubble and wool quality classes;
• Soil N balance and fertilization options;
• Chemical control of diseases, pests and weeds;
• Groundwater recharge and surface water run-off;
• Loss of top soil by erosion;
• Machinery specifications;
• Labour requirements;
• Farm finance.
CSIRO. Identifying the fit for forage shrubs in a crop-livestock system: use of a whole-farm optimization model

9. Validation
• Difficult validation of optimization models;
• Extensive process of verification;
• Expert assessment of input parameters and k.p.i. (e.g. whole-
farm profit, crop/pasture %, SR, rotations/LMU);
• Comparison with actual farming practice;
• Many issues analyzed with MIDAS/MUDAS over 3 decades, e.g.:
• New crops in rotation, e.g. lupins, canola;
• Saltland pastures;
• Trees and shrubs;
• Soil management, e.g. deep ripping;
• Impact of agric. policies, e.g. salinity tax, C price;
• Livestock breeds, e.g. Awassi, Dorper;
• Livestock management, e.g. time of lambing;
• Impact of grain quality;
• Machinery changes;
• Conservation strategies, e.g. stubble retention.
CSIRO. Identifying the fit for forage shrubs in a crop-livestock system: use of a whole-farm optimization model

10. Modelling shrub-based systems
• Biological traits
• Productive life of the stand
• Shrub density
• Shrub growth rate/biomass production
• Re-establishment period
• Nutritive value and anti-nutritional effects
• Proportion of understorey pasture
• Animal impact
• Liveweight gains due to permanent feed on offer
• Increased lambing rate from extra shade and shelter
• Environmental impact
• Groundwater recharge
• Top soil loss by erosion
• Costs
• Establishment /maintenance of shrub stand
CSIRO. Identifying the fit for forage shrubs in a crop-livestock system: use of a whole-farm optimization model

11. Land management units
LMU Main soil type Description W yield Shrub U/s medic
potential potential pasture
potential
1 Sandy loam Reliable, ↑ yields 2.0 100% 100%
2 Sandy Same, but fert req. 1.8 70% 67%
3 Calc, stony ↓ yld, wears mach. 0.4 50% 10%
4 Interm. Soils Med yields 1.6 90% 67%
5 Deep sands Erosion, ↓ yields 0.8 50% 17%
6 Lo o/ clay (w/ ssc) ↓↓ yld in dry spring 0.6 65% 40%
7 Lo o/ clay (no ssc) ↓ yld in dry spring 1.4 90% >100%
CSIRO. Identifying the fit for forage shrubs in a crop-livestock system: use of a whole-farm optimization model

12. 2000
1500
Shrub area (ha)
LMU 7
LMU 6
1000
LMU 5
LMU 4
LMU 3
LMU 2
500 LMU 1
0
0 10 20 30 40 50 60
Shrub %
Area of shrubs allocated to each LMU as they increase on the farm.
CSIRO. Identifying the fit for forage shrubs in a crop-livestock system: use of a whole-farm optimization model

13. Standard output
Crop area (% of farm) 56
Pasture area (% of farm) 44
Shrub area (% of farm) 0
Stocking rate (DSM/ha of farm) 2.4
Supplementary grain feed (kg/DSE/yr) 65
Groundwater recharge (mm/ha/yr) 174
Topsoil loss by erosion (m3/ha/yr) 90
Profit ($/ha/yr) 129
CSIRO. Identifying the fit for forage shrubs in a crop-livestock system: use of a whole-farm optimization model

14. Key model parameters
Parameters Std
Saltbush density (plants/ha) 1500
Saltbush nutritive value (MJ ME/kg DM) 7
Saltbush biomass production (kg DM/plant) 1
Saltbush anti-nutritional effects on intake (%) 3
Saltbush establishment cost ($/plant) 0.4
Price of wheat ($/t ASW) 280
Price of wool (c/kg clean WMI) 900
Price of prime lamb ($/kg DW) 4
CSIRO. Identifying the fit for forage shrubs in a crop-livestock system: use of a whole-farm optimization model

15. Key model parameters - SA
Parameters Min Std Max
Saltbush density (plants/ha) 1500 3000
Saltbush nutritive value (MJ ME/kg DM) 7 10
Saltbush biomass production (kg DM/plant) 1 3
Saltbush anti-nutritional effects on intake (%) 0 3
Saltbush establishment cost ($/plant) 0.2 0.4
Price of wheat ($/t ASW) 180 280 480
Price of wool (c/kg clean WMI) 700 900 1100
Price of prime lamb ($/kg DW) 3 4 6
CSIRO. Identifying the fit for forage shrubs in a crop-livestock system: use of a whole-farm optimization model

16. 600000
Whole-farm profit ($/year) 400000
200000
0
0 10 20 30 40 50 60
Shrub %
Change in whole-farm profit with increasing % saltbush shrubs.
CSIRO. Identifying the fit for forage shrubs in a crop-livestock system: use of a whole-farm optimization model

17. 600000
Whole-farm profit ($/year) 400000
200000
0
0 10 20 30 40 50 60
Shrub %
Change in whole-farm profit with increasing % saltbush shrubs.
CSIRO. Identifying the fit for forage shrubs in a crop-livestock system: use of a whole-farm optimization model

18. 600000
Whole-farm profit ($/year) 400000
200000
0
0 10 20 30 40 50 60
Shrub %
Change in whole-farm profit with increasing % saltbush shrubs.
CSIRO. Identifying the fit for forage shrubs in a crop-livestock system: use of a whole-farm optimization model

19. 600000
Whole-farm profit ($/year) 400000
200000
0
0 10 20 30 40 50 60
Shrub %
Change in whole-farm profit with increasing % saltbush shrubs.
CSIRO. Identifying the fit for forage shrubs in a crop-livestock system: use of a whole-farm optimization model

20. 600000
Whole-farm profit ($/year) 400000
<10% shrub area =>
200000
small decline in profit;
>10% shrub area =>
sharp decline in profit
0
0 10 20 30 40 50 60
Shrub %
Change in whole-farm profit with increasing % saltbush shrubs.
CSIRO. Identifying the fit for forage shrubs in a crop-livestock system: use of a whole-farm optimization model

21. Impact of different saltbush plant density levels and establishment
costs on whole-farm profit with higher % shrubs.
CSIRO. Identifying the fit for forage shrubs in a crop-livestock system: use of a whole-farm optimization model

22. Impact of different saltbush plant density levels and establishment
costs on whole-farm profit with higher % shrubs.
CSIRO. Identifying the fit for forage shrubs in a crop-livestock system: use of a whole-farm optimization model

23. 600000
Whole-farm profit ($/year) 400000
3 kg DM/plant
2 kg DM/plant
1 kg DM/plant
200000 0.5 kg DM/plant
0
0 10 20 30 40 50 60
Shrub %
Impact of different saltbush biomass production and nutritive value
levels on whole-farm profit as % shrubs increases on the farm.
CSIRO. Identifying the fit for forage shrubs in a crop-livestock system: use of a whole-farm optimization model

24. 600000
Whole-farm profit ($/year) 400000
3 kg DM/plant
2 kg DM/plant
1 kg DM/plant
200000 0.5 kg DM/plant
0
0 10 20 30 40 50 60
Shrub %
Impact of different saltbush biomass production and nutritive value
levels on whole-farm profit as % shrubs increases on the farm.
CSIRO. Identifying the fit for forage shrubs in a crop-livestock system: use of a whole-farm optimization model

25. 800
600
Units//ha/yr
400
Deepflow
Erosion
200
0
0 10 20 30 40 50 60
Shrub %
Impact of prime lamb price change on whole-farm profit for a range of
shrub areas.
CSIRO. Identifying the fit for forage shrubs in a crop-livestock system: use of a whole-farm optimization model

26. 800
600
Units//ha/yr
400
Deepflow
Erosion
200
0
0 10 20 30 40 50 60
Shrub %
Impact of prime lamb price change on whole-farm profit for a range of
shrub areas.
CSIRO. Identifying the fit for forage shrubs in a crop-livestock system: use of a whole-farm optimization model

27. 800
600
Units//ha/yr
400
Deepflow
Erosion
200
0
0 10 20 30 40 50 60
Shrub %
Impact of wheat price change on whole-farm profit for a range of
shrub areas.
CSIRO. Identifying the fit for forage shrubs in a crop-livestock system: use of a whole-farm optimization model

28. 800
600
Units//ha/yr
400
Deepflow
Erosion
200
0
0 10 20 30 40 50 60
Shrub %
Impact of wheat price change on whole-farm profit for a range of
shrub areas.
CSIRO. Identifying the fit for forage shrubs in a crop-livestock system: use of a whole-farm optimization model

29. 800
800
600
600
Units//ha/yr
mm//ha/yr
400
400
Deepflow
Erosion
200
200
0
0
0
0 10 10 20 30
20 40 30 50 60
40 50
Shrub %Shrub %
Changes in ground water recharge (mm/ha/yr) with an increasing
shrub area on the farm.
CSIRO. Identifying the fit for forage shrubs in a crop-livestock system: use of a whole-farm optimization model

30. Conclusions
1. At current production/quality levels, shrubs are marginally
profitable at up to 10% of farm, i.e. shrubs in the Mallee can
be introduced on small farm areas (≤ 10%) with minimal loss
in profit.
CSIRO. Identifying the fit for forage shrubs in a crop-livestock system: use of a whole-farm optimization model

31. Conclusions
1. At current production/quality levels, shrubs are marginally
profitable at up to 10% of farm, i.e. shrubs in the Mallee can
be introduced on small farm areas (≤ 10%) with minimal loss
in profit.
2. Profitability of forage shrubs depends on opportunity cost of
giving up other farm enterprises in the poorer farm soils;
CSIRO. Identifying the fit for forage shrubs in a crop-livestock system: use of a whole-farm optimization model

32. Conclusions
1. At current production/quality levels, shrubs are marginally
profitable at up to 10% of farm, i.e. shrubs in the Mallee can
be introduced on small farm areas (≤ 10%) with minimal loss
in profit.
2. Profitability of forage shrubs depends on opportunity cost of
giving up other farm enterprises in the poorer farm soils;
3. The current profit shortfall may well be made up through:
• R&D to improve increases in shrub quality/production, as well
as more effective shrub mixes/arrangements;
• Lower shrub establishment costs;
• Capturing of other benefits such as GHG emissions reduction
(C seq. and lower CH4 via bioactive compounds), animal
health/performance, improved soil condition, biodiversity, labour
management, and spread of farm risk.
• A change in market prices, e.g. lower grain and higher animal
prod. prices.
CSIRO. Identifying the fit for forage shrubs in a crop-livestock system: use of a whole-farm optimization model

33. Photo source: Enrich project
CSIRO. Identifying the fit for forage shrubs in a crop-livestock system: use of a whole-farm optimization model

34. CSIRO Ecosystem Sciences Acknowledgements
Dr. Marta Monjardino Future Farm Industries CRC
GRDC
Phone: 61 (0)8 8303 8413
Email: marta.monjardino@csiro.au
Web: www.csiro.au/ces
Thank you!
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