Binginbar feedlot heads south to cut costs during drought

But despite this, Nathan Simpson said the feedlot had gone from strength to strength.

"This financial year we should finish 55,000 lambs through the feedlot," Mr Simpson said.

"We run up to 4000 lambs at a time."

Mr Simpson, who farms with his brother Kieran and parents Ross and Michele, said up until five years ago they were a predominantly cropping business but had been trading lambs for around 13 years.

"We were doing that primarily on a Lucerne based perennial pastures and dual-purpose crops," Mr Simpson said.

In 2016 when they started the feedlot they planned to produce all their fodder requirements on farm but drought changed that.

"We haven't had an average season for the last three years so we haven't produced any fodder and have produced very little grain," Mr Simpson said.

However, instead of relying on the open market to buy in their hay, for the last three years the Simpsons have traveled south with their own gear to cut hay themselves.

"We've been lucky that Victoria and this year, NSW, had a relatively good start to the season," Mr Simpson said.

"Last year northern Victoria had a cracking season and then just got smoked by frost at the end, a stem frost event, 100 per cent write off, we were really fortunate to be able to jump on that.

"The guy we dealt with near Yarrawonga was a grain grower and had no livestock or hay equipment, so he was happy for us to go down and do the lot.

"This year we went down to a property near Jerilderie.

"Their crop had run out of moisture and they made the call pretty early to cut it for fodder, it suited us to go down and use our own gear which took the pressure off them as they were cutting a lot for themselves.

"In 2017 we went down to Tooraweenah and Narromine and baled frosted canola crops for silage."

Mr Simpson said although it took around six weeks in total away from home to bale enough hay themselves, the cost-savings were worth it.

"It was significantly cheaper than going on to the open market in a more traditional space," he said.

Mr Simpson said it also gave them the opportunity to utilise their hay production machinery.

"There would be close to $750,000 of hay equipment that we've got that would be absolutely useless if we didn't go off farm," he said.

Mr Simpson said they had also been able to source enough barely for the next year but still needed to secure wheat.

"The barley we've sourced this year is coming from Mallee in Victoria, by the end of December we will have enough barley to last us until October-November 2020," he said.

"Hopefully we should be able to secure some wheat in the next month."

Mr Simpson said the fodder costs they had incurred during the drought had been largely offset by the increasing price of lamb.

"If lamb hadn't gone from $5.80-$6.00/kg to $7.50-$8.00/kg we wouldn't be making any money," Mr Simpson said.

"Our break-even point is $7/kg a lamb but that's just gross margin on that lamb, we've still got to cover all the overheads."

The Simpsons sell their lambs to Thomas Foods International at Tamworth, drafted out of the feedlot when they reach 50kg live-weight, usually for a carcase weight of 24kg.

Mr Simpson said they sourced around 60 per cent of their lambs from repeat vendors, 20 per cent through Auctions Plus and 20 per cent through livestock agents and the saleyards.

"We're constantly buying lambs, there's not too many weeks of the year we don't have lambs we're inducting," Mr Simpson said.

He said they had previously bought in lambs at around 24-30kg and put them on pastures or crops to graze before introducing them to the feedlot when they got to 36kg.

But, since the drought they have had to skip that step and were looking to source heavier lambs.

"Because we have no ground cover at the moment, no crops or pastures, we try to just source lambs at a weight where they're ready to go straight into a feedlot," Mr Simpson explained.

He said they spent 35 days in the feedlot on average, eating around 1.6kg a head.

Mr Simpson said he was hopeful that the pastures would come back quickly when they got decent rain but the key was follow-up falls.

"Last week we had 14 millimetres, one of our better falls for quite a few months but just five days later it's full of dust again, that rain has had basically no impact," Mr Simpson said.

"It's a matter of breaking that cycle and having some weather patterns come through and dump moisture."

He said the constant dust storms did have some effect on the sheep in the feedlot.

"It does cause some respiratory issues and it's uncomfortable, no one likes standing in a dust storm," Mr Simpson said.

But he said overall they had been able to manage the drought, while growing their business. "We celebrated 150 years of our family at Binginbar last year and we're trying to do everything we can to keep that going and build upon it," Mr Simpson said.