Tips for a tough season: destocking strategies – southern Australia

20 November 2015

This is the fifth part in our series on planning for tough seasons.

Tough seasons present tough decisions, but a clear plan can take away some of the stress.

More Beef from Pastures Victorian coordinator Darren Hickey of Victoria’s Department of Economic Development, Jobs, Transport and Resources (DEDJTR) said preparation for destocking is critical when below-average rainfall and high temperatures place stress on stock, feed and water.

“Destocking is not a decision to make when you are actually destocking,” he said.

“A clear plan on how to manage the season as it unfolds avoids making decisions under pressure.”

He said an effective drought mitigation strategy should be built on measuring and monitoring.

The first step is to take stock of the situation by:

  • making an inventory of available feed – include pasture, forage crops, hay, silage, grain
  • preparing a forage budget and revising stocking rates accordingly
  • assessing available water resources and the cost of carting water.
  • using weather tools to estimate how the season will pan out.
  • condition scoring animals to set a baseline.

“The next step is to turn this information into a plan, and write it down – a plan in your head is not a plan,” Darren said.

“The impact of over-grazing a pasture can be long-term, so your feed budget is an important tool to guide decisions around offloading stock. Determine if you can afford to – or want to – feed stock through to the expected seasonal break. Factors include feed availability, freight costs, inclination/ability to feed, as well as an expected date of season-breaking rain.”

Darren advised producers to assess feed supply and animal demand in the enterprise, using common units of measurement (mega joules of metobolisable energy per kilograms of dry matter – MJ ME/kgDM) and then take steps to fill (feeding) or reduce (destocking) any gap. Use tools such as pasture growth predictors and feed demand calculators.

DEDJTR beef and sheep specialist Tim Hollier added that animal condition was also important to determine destocking decisions and assess the commercial value of stock and timing of any sales.

“Assess sheep and cattle body condition scores early to set a benchmark, and regularly monitor to ensure livestock welfare is not compromised during drought conditions,” he said.

“It can be more difficult to monitor body condition of sheep than cattle, as wool can inhibit a visual assessment. A strategy to overcome this is to identify (e.g. with tags) a representative sample of the flock and give these animals a regular hands-on assessment to monitor flock condition.”

When to sell

If feeding, agisting or leasing are not options to take pressure off pastures, it is time to take a close look at your flock or herd to guide destocking decisions.

“You can reduce stress down the track by developing a staged process, so as you reach each pressure point (such as pasture or animal condition) you have already determined which stock go next,” Darren said.

Consider involving someone external to the business, such as a farm consultant, stock agent or even a neighbour, to objectively prioritise stock. Run these animals separately or identify them with a tag.

Individual business goals will determine which stock are the first to go, but a good rule of thumb is to classify stock based on productivity and feed utilisation:

  • Stock with market value: Calculate the cost of feeding young stock to a target weight/age compared to the value if sold early.
  • Cows and calves: Weaning calves early can reduce pressure on pastures, but weigh up the costs of providing the energy requirements to calves and cows separately.
  • Replacement heifers: Consider selling these animals early as they are not likely to be fully productive until they have produced their second calf. Until then, these animals are not converting feed into income. However, retain young breeders with proven performance as younger genetics are part of a good breeding program.
  • Breeding herd: Selling breeders is one of the hardest decisions in drought, so base decisions on current value and future productivity for your business. Identify animals with abnormalities and structural defects, and use production records to identify breeders that are not as productive.

“Destocking decisions can impact productivity of a business for two or three years down the track, so collect as much information as possible to define your options, prioritise these options and made a decision,” Tim said.

“Planning won’t just prepare you for decisions down the track, it means you can organise shearers early or take advantage of market conditions while stock still have value.”

Opportunities

It is important to set up your business to return to full production as soon as possible. Restocking can be expensive, so consider other short-term options such as trading stock to generate cashflow. When buying new livestock, be aware of biosecurity risks such as introducing weeds, pests, diseases and drench resistance.

Destocking presents the opportunity to remove poor performing or genetically inferior animals from your business, and restocking is a chance to build a younger, more productive herd or flock. Take advantage of the opportunity to introduce new genetics or decrease the average age of your breeding animals, to increase productivity and reduce animal health issues.

There are also economic considerations around destocking– such as offsetting an abnormal profit – and reserving income in farm management deposits to fund restocking.

Tools and resources:

More information:

Darren Hickey E: darren.hickey@ecodev.vic.gov.au, Tim Hollier E: tim.hollier@ecodev.vic.gov.au

Read the other articles in this series on planning for tough seasons: 

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