Evaluation of the least cost option to manage pastures in a wet winter in south-eastern Australia1

Extended wet winters present a challenge for grazing management for some farm businesses. Extended wet winters can cause waterlogging of pastures and when such pastures are grazed, soils and pastures are damaged. This research analysed, for two representative dairy farm businesses in south-eastern Australia with 100 hectares affected by a wet winter: (i) the cost of doing nothing differently to grazing management to manage pastures; (ii) the cost of actively managing wet pasture through ' on-off ' grazing if the case study farm had a stand-off area; and (iii) the maximum amount of capital that could be invested in a stand-off area for wet pasture grazing management, if the farmer wants to earn a 10 per cent annual return. To do this analysis both biophysical modelling and economic analysis was used. It was found that, if the representative dairy farm businesses did nothing differently to grazing management during an extended wet winter, this could result in extra costs between $9,000 to $50,000 depending on the likelihood of a wet winter. However, if the representative farmer had a stand-off area and practised on-off grazing then the annual cost of this grazing strategy could be between $300 to $2,600. The maximum amount the representative farm business could invest in a stand-off area to earn a 10 per cent annual return, and be no worse off than doing nothing differently to manage wet pastures, was found to be from $50,000 to $250,000, depending on the frequency of the extreme wet weather. If the capital cost of the stand-off area was less than this amount, then the representative farmer would be better off investing in a stand-off area and using on-off grazing rather than doing nothing differently. A key conclusion from this analysis is that the representative farmer may be better able to manage the risk of a wet winter through active grazing management because the annual costs of an unchanged grazing management regime during a wet winter are more volatile than the costs of actively managing an extended wet winter. Lastly, a cost framework has been developed that other farm businesses could use to consider the costs of different wet winter pasture grazing management strategies for their businesses.