Ground Cover North : Ground Cover 095 November-December 2011 - North
By Jillian Staton ORM Communications n Last year’s wet harvest has prompted growers to revisit options for getting their crops harvested quickly and avoid losses caused by unusually heavy rain, hail, wind, staining, sprouting and vermin, said ORM’s Phil O’Callaghan. Speaking at a GRDC Update for Growers in September, Phil said that options being considered included: n improving harvest efficiency and/ or capacity through the acquisition of new or secondhand equipment – for example, additional or larger headers, mother bins and chasers; n bringing in contractors; and n starting harvest earlier – either by planting some early maturing crops or using aeration drying to meet delivery standards. He said that while improving harvest efficiency had a cost, that cost could be offset with income earned as a result of a quicker harvest reducing yield or quality losses. Phil encouraged growers to carry out a cost- benefit analysis to determine the best option (or combination of options) for their business. This involved assessing the risk of harvest- damaging events and estimating the potential loss of income that could result, including yield loss, quality downgrades and vermin damage. ProCrop’s Peter Ridge used the Australian Rainman software package to historically determine the chances of suffering a 50-millimetre rain event over harvest in eastern Australia. These ranged from 3.3 per cent in drier regions to 14 per cent in higher- rainfall regions such as northern NSW. Peter said that if growers were hit with a rain event similar to last season, losses could be as high as 50 per cent, although 10-year averages suggested that a more realistic figure would be closer to 10 per cent. “The question then for growers is how much of that loss could be reduced by improving harvest efficiency through increased capacity and/or timeliness,” Phil said. As a rule of thumb, Phil said that a higher machinery investment can be justified if potential loss of income is similar to the annual cost of the extra machinery. The point at which the acquisition becomes cost-effective will depend on whether the capacity of the equipment is matched to the size of the enterprise. Using the example of a $240,000 header on a medium-sized farm and a $610,000 header on a large farm, Phil calculated that acquisition became cost- effective at a 4000-tonne and 12,000t harvest, respectively (see Table 1). “In addition to header capacity, further harvest efficiency can be achieved through strategies such as mother bins, chaser bins and/or grain bags,” he said. In Table 2, Phil compared the base cost of harvest (one header without any other options) – $13.22 per tonne – with the estimated costs for in-paddock grain-handling options. Although these can increase harvest cost by $2 to $4/t, he said that this was a relatively low cost to achieve efficient harvesting – and in years such as 2010 would provide very healthy returns. Phil’s calculations revealed that the net cost per tonne associated with the acquisition of mother bins, chaser bins and grain bags were higher than the increased income. However, the return on investment was higher for each compared with the header due to the lower capital cost, with grain bags having the best return on investment. “Mother bins avoid the costly pathway of transporting and augering grain into a central on-farm silo system, which can add $10 to $15 to the cost per tonne,” explained Phil. “In addition, trucking contractors will often discount their rates by at least $1/t for the speed advantage of large and efficient in-paddock storage.” Phil also considered the costs and benefits of building or retrofitting on-farm storage with aeration drying to enable early harvest. In addition to the capital outlay, growers need to consider cartage and auguring costs, and the electricity for running the aeration fans. When considering gains from improved harvest efficiency, Phil said silo aeration would be the least effective option for growers unless they were operating in areas with high rainfall and cool temperatures. He said that another option for grain growers was to use the services of contract harvesters, who assume all the risks of ownership. Those risks include uncertainty about trade-in values, finance costs and the degree with which repair and maintenance costs can escalate. He stressed, however, that the success of this option “all comes down to the relationship with, and reliability of, the contractors”. □ GRDC Research Code ORM00002 More information: Phil O’Callaghan, 03 5441 6176, firstname.lastname@example.org; www.grdc.com.au/ORM00002 n Agricultural scientists from around the globe gathered in Brisbane in the last week of September to discuss sustainable food production at the 5th World Congress on Conservation Agriculture. The event attracted more than 500 scientists, students, farmers, policy makers and conservationists from 70 countries. The GRDC and the Australian Centre for International Agricultural Research (ACIAR) were the major sponsors of the congress. GRDC managing director John Harvey said the corporation was proud to be supporting the international agricultural scientific community in its endeavour to design more productive, economic and sustainable farming systems. “The GRDC will invest over $160 million in research and development this year and our aim is to ensure the grains industry is sustainable and profitable,” he said. “Ultimately, that means ensuring the most effective sustainable farming systems research is funded and its outcomes Dollar$ & $en$e NOVEMBER – DECEMBER 2011 GROUND COVER 28 TABLE 1 Machinery investment matched to farm scale Units Medium farm Large farm Contracting Header value $ 240,000 610,000 – Depreciation over 5 years $ per year 24,000 77,000 0 Harvest area hectares 1000 3,000 – Harvest tonnes tonnes per year 4000 12,000 – Rotor hours rotor hours per year 200 300 – Repairs and maintenance $ per year 10,000 20,000 – Labour costs $ per hour 30 30 – Harvest cost is ... $ per rotor hours 353 564 450 OR $ per hectare 78 74 65 OR $ per tonne 16.35 13.24 11.25 TABLE 2 Comparison of harvest efficiency options One header 2nd header One mother bin 2nd mother bin Chaser bin (+ tractor) Grain bags Chaser & grain bags Aeration silos Purchase Price $ 610,000 610,000 120,000 120,000 100,000 45,000 145,000 750,000 Annual Cost – cashflow $ 158,640 246,000 29,820 44,436 40,440 40,000 80,440 105,300 Efficiency Gain % Base +100% +30% +40% +30% +20% +40% +10% Savings 4% loss – average $ 0 90,000 27,000 36,000 27,000 18,000 36,000 9,000 Return on investment % 0 18 22 30 27 40 25 1 Net cost per tonne $/t 13.22 13.05 13.46 13.92 14.34 15.05 16.92 21.25 (From left) GRDC chair Keith Perrett, Botswana Department of Agriculture Research’s Majara Chite Stephen and Ugele Majaule, GRDC Northern Panel member Aaron Sanderson and GRDC acting executive manager Stuart Kearns at the 5th World Congress on Conservation Agriculture in Brisbane in September. reach growers for implementation.” ACIAR chief executive officer Dr Nick Austin said Australian expertise in conservation agriculture was among the world’s best. “This makes Australia uniquely placed to transfer conservation agriculture to a range of developing country agricultural systems, through ACIAR,” Dr Austin said. “With around 70 per cent of Australia’s broadacre farming areas under conservation agriculture – a larger proportion than for any other country in the world – we are in a good position to share our knowledge.” Dr Austin said the congress provided a platform to further share this knowledge with scientists from developing countries, including many where ACIAR was already funding projects. Keynote speakers included Gunnedah, NSW, grower and former GRDC Northern Panel member Richard Heath and CSIRO’s John Kirkegaard, who works on GRDC-supported dual-purpose grain and grazing crop research. GLOBAL FOCUS ON CONSERVATION FARMING Ground Cover will have more reports from the congress in its January issue. □ – Rachel Bowman More information: Stuart Kearns, 02 6166 4500; 5th World Congress on Conservation Agriculture, www.wcca2011.org Harvest efficiency now front-of-mind As a rule of thumb, a higher machinery investment can be justified if potential loss of income is similar to the annual cost of the extra machinery.
Ground Cover 096 January-February 2012 - North
Ground Cover 094 September-October 2011 - North