Modelling the impact of increasing supplementary feed allowance on predicted sheep enterprise production, profit and financial risk across southern Australia

Context Supplementary feeding may alter sheep enterprise production and profit margin, but use may vary across regions, sheep breeds and mating seasons. Supplementary feeding is a means of ensuring adequate nutrition but increases operating costs. Modelling has previously indicated the most profitable sheep enterprises optimise stocking rate and target lamb production, whereas those that minimise supplementary feeding incur the least financial risk. Aims To explore the impact of increasing supplementary feed allowance on production, profit and financial risk. Methods Seventy-two sheep farm enterprises were simulated across eight southern Australian locations, including three breeds and three mating seasons. For each enterprise a low grain allowance (LGA) of 30 kg/head.year (threshold used in previous modelling) was compared to a high grain allowance (HGA) of 35 kg/head.year and 42 kg/head.year for Merino and non-Merino ewes (current industry recommendations), respectively. The financial risk of each enterprise was determined via Conditional Value at Risk of gross margins over 30 years, exploring downside risk in the worst 20% of scenarios. Key results A HGA increased production and profit in 32% of farm enterprises, but financial risk was often increased. Merino enterprises were generally the most profitable, least risky and consumed the greatest amount of supplementary feed, followed by Composite and then Maternal enterprises. Summer and autumn mating was often most profitable, but high supplement consumption in autumn-mated enterprises increased financial risk. Conclusions Increasing supplementary feeding may improve production and profit but may also increase financial risk using the parameters examined. Implications Producers may be able to improve the production, profit and financial risk of an enterprise through increased supplementary feeding, but this will be dependent on breed, input costs, commodity prices and location.