Australian sheep farmers know the story well: one season brings a dry spring and the next a sudden drop in livestock prices. These shocks can quickly erode profits — unless farm businesses adapt.
After the poor spring of 2023, followed by a late break in 2024 and low livestock prices. Many farmers were pessimistic about the future of sheep enterprises, with a number even opting not to mate ewes in 2024. These real-world decisions highlighted the need to understand what management strategies are truly profitable when feed is short and prices are down.
To answer this, the Farm Optimisation Group and collaborators used whole-farm optimisation models to explore how producers can respond to feed shortages and price volatility. The research focused on two representative farms in south-western Australia: one crop-dominant and one sheep-specialist.
What We Looked At
The models tested the impact of:
- A climate shock — dry springs leading to reduced feed supply.
- A market shock — lower livestock prices, both short-term and prolonged.
The model used captures a wide range of management options available to mixed-enterprise farms — from adjusting sheep sales, flock size and nutrition, through to confinement feeding and changes in crop/pasture areas.
The optimisation algorithm then selected the most profitable mix of tactics for each scenario, balancing current known conditions (such as feed supply or livestock prices) with uncertainty about future seasons.
What We Found
Short-term tactical responses can significantly reduce profit losses from shocks. For example:
- Adjusting sales timing helped buffer farms against sudden price drops.
- Flexible feeding strategies were critical during dry springs.
- In our scenarios (dry spring plus lower sheep prices), the sheep-dominant farm experienced larger profit losses than the crop-dominant farm. This reflects the nature of the shock; under different shocks (e.g., crop price declines) the relative impact could differ.
Across both systems, farmers who embraced a mix of strategies weathered shocks far better than those who stayed fixed in their approach.
Practical Takeaways for Farmers
The modelling highlighted several clear, actionable recommendations:
- Dry springs (feed shortage):
- Confinement feeding or supplementary feeding can protect pastures and maintain breeding stock.
- Tactical adjustment of crop and pasture areas helps balance feed and crop yields.
- Short-term livestock price drops:
- Delay selling where possible — holding stock a little longer can avoid low-market sales.
- Focus sales on stock classes that least disrupt long-term flock structure.
- Prolonged price downturns:
- Consider structural changes such as reducing flock size or shifting the enterprise mix.
- If a prolonged price downturn is expected, immediate destocking can be profitable. However, because price forecasts are highly uncertain, the model suggests only targeting low-priority animals, with less emphasis on destocking when feed supply is strong.
- Mating decisions:
- The model did not find leaving ewes unmated to be profitable. In every scenario, mating all viable ewes remained the best economic choice.
- Overall:
- Flexibility is key. Farmers who adapt sales timing, stocking rates, and feeding strategies protect profits best.
- No single tactic is a silver bullet; resilience comes from a toolkit of options.
📢 Full published article coming soon — we’ll share the link here once it’s available.
💡 This research was supported by the Western Australian Department of Jobs, Tourism, Science and Innovation