An estimate of profit adds in the other variable costs, harvests costs and returns from production into the minimum cost to crop. Without undertaking a much more intense data gathering exercise on the farmer’s part (eg. fuel use, hours worked for each operation), we have only been able to estimate machinery-related variable costs. This analysis uses machinery costs estimated for the 2000 hectare hypothetical farm used in analysis of the BCG Farming Systems Trial (Table 27, add ref). Because costs were quite similar across all systems, the Fuel burner ‘Till’ costs were used for operations, except in the case of No Till sowing where the Fuel burner ‘No Till’ costs were used. In the Minyip Chickpea paddock, sowing fuel costs were reduced by 1/3 to account for the wider row spacing used. Harvest and cartage costs were calculated using the relationship from the systems trial – Cost ($/ha) = 18.4 x yield (t/ha) + 8.61.
Table 27. The variable component of machinery costs from the BCG Farming Systems Trial.
The product and yield outcomes from the paddocks led to a diverse set of gross returns from each paddock (Table 28).
Table 28. Grain and hay production from focus paddocks, 2006-2008, using consistent pricing across paddocks and years. Where Product is ‘N’, a quality was not reported by the farmer.
a. The return for each of the Patchewollock Till crops in 2008 is shown multiplied by their proportion of the paddock: 1/3 lupin, 2/3 pea.
There was also considerable variation among crop gross margin, which is as close as we can calculate to profit without more data on livestock production. Profits at Culgoa were consistently negative, with gradual increases as costs were reduced (Table 29). The Donald No Till paddock was easily most profitable, producing good returns in all years. The Till paddock also produced a modest profit across the rotation, and demonstrated one instance where the continuous crop approach was producing better returns than a fallow-cereal rotation. At Minyip, losses with pulse crops were similar in both paddocks in the first year. In 2007, the wide row chickpea crop made reasonable profits, while the Till cereal crop made a small profit. The situation was repeated in 2008 with a second cereal crop.
At Patchewollock No Till paddock profits were consistently good. The Till paddock produced a good return in 2007 with a cereal hay crop, made a small profit with peas/lupins in 2008, but lost money with a grassy wheat crop in 2006 and the sowing costs of a sorghum crop in summer 2006. There is likely to be significant livestock income that needs to be factored in to the final result for Patchewollock Till.
At Sea Lake, the Till paddock produced good returns in cropping years, despite partial frost in 2006. The No Till paddock produced increasing profits as input levels were adjusted to match the season. Even after adjustment for the fallow year, the fallow rotation used in the Till paddock was more profitable (and is also used on part of the No Till farm).
The hay crops at the Yaapeet Till paddock were consistently profitable, even with relatively low yields for vetch hay in 2008. The initial cereal crop in the No Till paddock barely broke even. A subsequent chickpea crop in 2007 struggled with poor early growth, but still produced a reasonable margin. The final cereal crop was healthy and highly profitable.
Table 29. Yearly crop gross margin for focus paddocks, 2006-2008.
- Crop and non-crop years have been weighted to give an average across two years of the fallow-crop rotation.
- Culgoa is an exception to this, as the crop years both followed preceding cereal crops.
If typical cropping machinery overhead levels of $25-30/ha are included, there is no major change to whether a paddock is profitable. If other overheads such as rates, finance, administration costs etc. are added then the profitability of the Sea Lake No Till paddock becomes marginal.