John Young
The long term decline in the rural population in most regions has reduced the ability of farmers to attract and retain farm labour. This has had ramifications for sheep farmers as sheep production is relatively labour intensive. Furthermore rate of improvement in the productivity of labour in the sheep industry has been low compared to the cropping enterprise.
There is a large variation between producer’s cost of production within and between regions. This is a result of variation in production per hectare and adoption rates of more efficient management practices such as work amalgamation and sheep handling systems that allow more efficient undertaking of routine tasks such as drenching, dipping, jetting and crutching. Genetic improvement to develop ‘easy-care’ sheep that are more resistant to disease require less intervention when lambing and are more resilient and require less supplementary feeding during period when there is a shortage of paddock feed can also reduce labour costs and make sheep production more appealing. However, there is limited information available on the break-down of labour use in sheep production systems, the relative importance of different approaches to labour saving and affect of labour saving on enterprise profitability and optimal farm strategy.
Such information is likely to be useful to farmers to help them assess potential gains in productivity and also in the development of research priorities.
Detailed assessments of the impact of improvement in labour productivity have not been done for mixed farming systems in southern Australia partly because of the complexity of the problem and also the complexity of the production system. Changes to one part of the production system at a particular point in time may have flow on effects to other parts of the system in a later time period.
MIDAS (Model of an Integrated Dryland Agricultural System) provides means by which the impact of changes to the farming systems can be estimated, whilst accounting for the interactions between enterprises, in terms of the change in optimal farm strategy and whole farm profit. MIDAS has been developed for 13 regions within the mixed farming/sheep production zones of southern Australia. Over the past 30 years MIDAS has been applied to a broad range of sheep production problems confronting farmers
The aims of this project are:
1. To identify the importance of saving labour in the sheep enterprise and identify critical periods of the year in which saving labour has the highest value (i.e. a relative economic value for labour in different months).
2. To identify the relative importance of specific management and genetic interventions to improve labour efficiency and its impacts on profitability.
Method of analysis
The analysis in this report was undertaken using MIDAS. MIDAS is a whole-farm bio-economic model that is representative of a typical farm is a specific region. It describes the production relationships in mixed farm and sheep production systems. It is designed to determine which management strategies for a typical farm that maximise farm profit. As an optimising model it is able to select the best farm strategy for a given set of assumptions from a large range of options..
Four versions of MIDAS, representing four regions of southern Australia were adapted to take explicit account of the demands for labour in the sheep and crop enterprises over the course of a calendar year. The four regions included: Great Southern of WA (GSWA), Central Wheatbelt of WA or the Cereal Sheep Zone (CSZ), southern Victoria (SWVic) and southern NSW (SNSW).
A multi-factorial analysis was completed to examine the effect on profit of improvements in the efficiency of labour allocated to sheep husbandry for two lambing times in each of the four regions. The benefit of improved efficiency was determined for each of a range of husbandry tasks as well as the benefit of improving efficiency of all tasks simultaneously.
In addition to reducing the time taken to complete individual husbandry tasks the benefits of implementing each of five management changes/innovations was also explored. These are:
- Running larger mobs of sheep,
- Employing contractors to complete certain tasks,
- Adoption of lick feeders,
- Breeding of “Easy care” sheep,
- Adoption of shedding sheep.
These were assessed for four scenarios that differed in the availability of labour as an input to production.
Conclusion
Labour shortages on farm have a large impact on farm profitability. Demand for labour in the sheep enterprise is very seasonal so this demand is best met by hiring casual labour. However casual labour is not always available and some would prefer to hire casual staff. Therefore technology or strategies that reduce the labour required in the seasonal peaks will likely increase farm profit.
Owner labour is not able to fully compensate for low labour availability because there are insufficient owner hours available during the times of peak demand. Whilst increasing the number of hours worked can improve profit, additional labour needs to purchased and/or labour efficiency improve to realise the full benefits of overcoming the constraints on labour.
A number of strategies and technologies could be adopted to reduce labour input. Improving efficiency of completing single tasks leads to small or no increases in profit. Freeing up labour in itself is not sufficient to increase farm profit because the spare labour created by the efficiency needs to be able to contribute meaningfully to other tasks that will increase production. The usually requires labour input to be reduced in a number of periods
Reducing labour input for most general tasks in the GSWA and SWVic leads to large profit increases. Sheep monitoring and grain feeding led to the biggest increase in profit across all regions. Reducing labour input for pasture monitoring was also of high value in GSWA and SWVic. Efficiencies in mustering and administration were of high value in most scenarios examined.
Easycare sheep and lick feeders were shown to be high value strategies primarily because they led to reductions in the requirement for labour across many period of the year. Employing contractors to undertake husbandry tasks like dipping and jetting were of lower benefit because they free up labour in only a small number of periods.
MIDAS proved to be a very effective tool for analysis of labour in sheep production systems of southern Australia.
Implications of Research Findings for Industry
- Farm profitability can be improved dramatically if labour can be hired to supplement the owner operator. However, sheep producers find it difficult to hire labour because there is no pool of willing workers. A potential area for research is to improve sheep handling methods so that workers are more willing to be involved in sheep operations.
- For a strategy to be profitable across a number of environments and times of lambing it must reduce the requirement for labour for a number of periods of the year. Reducing the labour demand in short windows is not as valuable because labour shortages in other periods will limit the extent to which sheep numbers can be increased.
- The returns from saving labour are much greater in the sheep dominant higher rainfall regions and therefore the net benefit to the industry will be strongly influenced by these regions. The benefits of improving labour efficiency in lower rainfall regions are likely to be lower.
- Quantifying the tradeoffs between production and reducing labour input would help farmers make more informed decisions regarding prioritising jobs on farm. If the tradeoffs that relate to timeliness of jobs could be quantified then on-farms jobs could be better prioritised.
- Increasing the efficiency of monitoring sheep and pastures has a high value. Some effort has been expended in the area of remote monitoring of pastures, however, to date there has been limited uptake by producers. The lack of adoption may be due to the focus on technology that provides farmers with data on pasture growth rate. An inference drawn from the results of this study is that information that provides a warning that the animals or pastures need closer monitoring, would be of more benefit.
- Increasing the efficiency of mustering also has a high payoff for most regions and particularly for the regions with high sheep numbers. This indicates that investment in laneways to allow easy movement of sheep may be profitable.
- Increasing mob size is valuable in all regions. One method of achieving this is through rotation grazing. Rotation grazing has been evaluated in trials but the requirement for labour has not been formally assessed.
- Improving the efficiency of all the husbandry operations together has a high payoff for the regions that are livestock dominant. A possible mechanism for achieving this is through improved sheep handling facilities. This improvement dovetails with point 1 regarding making sheep related jobs more acceptable and less physically demanding.
- One of the limitations of this analysis was a lack of data regarding the amount of time producers spend on different jobs. In order to carry out detailed benefit-cost analysis on potential labour saving projects this baseline information would be required. It may be possible to collect this data on-farm if farmers were provided a datalogger and trained in its use. Provided the period of time being logged was kept short farmers are likely to be willing participants.
- EasyCare sheep and non-wool (or shedding) breeds of sheep both showed as likely to be profitable for the owner operator who is unable or unwilling to hire labour. These two genetic approaches to saving labour are likely to be competing for adoption with the same producers and therefore improving the information available on the productivity of the genotypes and the amount of labour saved would allow more informed decision making.
- Use of contractors will not lead to large increases in profitability unless the range of jobs that they perform is increased. If farmers become more sophisticated with the management of labour then there is likely to be a market niche for contractors who provide a wide range of services to industry.