'Destocking was our best beef decision'

Mullaley beef producers Nick and Alex Anderson transformed their business to withstand drought conditions


Beef News
Nick and Alex Anderson with their son Ollie of Newstead Pastoral Company, Mullaley, sold all of their breeding herd to create a more flexible business. Pictures: Lucy Kinbacher

Nick and Alex Anderson with their son Ollie of Newstead Pastoral Company, Mullaley, sold all of their breeding herd to create a more flexible business. Pictures: Lucy Kinbacher

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They have been able to maintain ground cover and complete much quicker turnovers despite the drought.

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Mullaley beef producers Nick and Alex Anderson destocked their entire herd of 350 Hereford breeders, but they don't regret it for a second.

The Andersons transformed their entire operation and have been able to maintain ground cover and complete much quicker turnovers despite the dry season.

The young couple, who are parents to 16-month-old Ollie, took over the reins of their 1800 hectare beef and cropping property in 2016.

But drought hit not long after harvest and the couple were beginning to hand feed the remainder of their herd two weeks before Ollie was born.

It only took six weeks before they realised it wasn't a viable option.

Nick and Alex Anderson with their young son, Ollie.

Nick and Alex Anderson with their young son, Ollie.

"We did the maths on it a while ago and, if we kept the whole herd, we would have spent $800,000 on feed," Mrs Anderson said.

"That would be a period of 18 months and our cows would have been worthless by now.

"Our one biggest regret from this was destocking too late.

"In hindsight we should have destocked earlier but that is something we will learn for the next one."

They were too cash starved to depend on the slower turnover rate of breeding but valued the use of cattle to help restore their pastures and better prepare their ground for even the smallest rainfall.

Now the couple operate a much more flexible business and are currently strip grazing a herd of 141 trade cows on a 66 hectare portion of barleycrop planted on May 12 with just 25mm of in-crop rain.

Their cows in a fresh strip graze paddock on the right compared to one that they have eaten on the left.

Their cows in a fresh strip graze paddock on the right compared to one that they have eaten on the left.

The mob are currently grazing about two hectares/day and have an average daily weight gain (ADG) of about three kilograms.

As part of their time management grazing system, cattle are checked twice a day to ensure adequate ground cover is retained, and moved on within 12 to 24 hours.

"We were never dreaming of actually turning this (crop) into dollars," Mr Anderson said.

"We were just planning on turning it into a mat (for ground cover) so we spent as little dollars on it as we could but it grew more than expected so we then had some options.

"The dollars stacked up pretty well, almost more competitive, doing this (grazing the crop) than making hay. By grazing rather than cutting for hay we could maintain more ground cover and achieve some knock down, and grazing a crop like this achieves a very quick turn around rate."

The couple expect to make up to $500/head from their trade cows with the average cow only being held for about 80 days.

The Andersons have no regrets about changing their business.

The Andersons have no regrets about changing their business.

"We paid an average of $779 landed for an average weight of 370kg," Mr Anderson said.

"As soon as they are out of withhold at an ADG of 2kg from when we last weighed them, the top 42 will be in the top grid at Throsbys and should average 612kg so at a 45 per cent dress weight and $4.70/kg is a smidge under $1300/hd with transport to come out.

"A further 44 of them are yearling heifers, again at 2kg/day they will be an average of 460kg odd after 60 days and at $2.50/kg (last Gunnedah sale average for yearling heifers over 400kg) should be $1150/hd.

"From there we will dribble them out according to feed availability and when they get heavy enough to hit the top grid.

"The trade should be wrapped up within 120 days."

The couple now see themselves as grass producers, rather than beef producers.

They forecast on feed budgets rather than rainfall and look for opportunities instead of drowning in seasonal tides.

They have only had 324 millimetres, or just over half of their annual rainfall, in the last 12 month rolling rainfall, but by better managing their land, they have been able to continue a positive cashflow business with little stock.

An area of rested country.

An area of rested country.

"One of the things that scares people about getting rid of stock is losing your cashflow and we have found that cash flow has been back, but there has never been a point where there hasn't been something happening," Mr Anderson said.

"When we destocked we kept some weaners and they did really well and then pretty much all (trade) cows.

"At the moment the cows, that's where the margin is and it's also that they are quick, so if you can't budget more than 60 days of feed, they are the safest thing.

"And feed quality as well; cows will get fat on drier grass."

The couple make business plans with the expectations it won't rain, allowing for much more flexibility.

The expect to trade their cows as quickly as possible.

The expect to trade their cows as quickly as possible.

"For us we felt that the stress was dramatically reduced by having a much more flexible enterprise that we could ditch overnight and our turnover was much higher and our income from those animals was going to come from a much shorter time," Mrs Anderson said.

"From breeding we were looking at another 18 months to turn off those calves into the market."

Mr and Mrs Anderson aren't locking themselves into trading or knocking back the opportunity of breeding in the future, but they don't fill their paddocks just for the sack of it.

"We always try and measure up whether putting cattle in is going to make that paddock more ready to accept the next rainfall or not because we just cant afford it (to make rainfall less effective) and we have learnt the hard way," he said.

"Once you get a paddock bare, it's very difficult to get back from, especially in the drought.

The couple move their herd once a day.

The couple move their herd once a day.

"If you are not looking after the ecology and particularly the water cycle than you are only going to extend your drought."

Mr Anderson understood the opportunity to destock may not suit everybody, but he believed it allowed less risk in their business.

"If we work with the rainfall we have had rather than the rainfall we expect we never stick our neck out and get stung," Mr Anderson said.

"The system we are trying to trade on relies on constant turnover to be super effective so it gets a little bit hard when you have to destock, you are exposed to market fluctuations, but you are still better off having fat cows than skinny ones and day of the week."

Since implementing their new management approach and retaining ground cover, the Andersons have seen a number of pastures appear in areas they didn't seed.

Tall oat-grass, wild oats, vetch, red grass, bambatsi and purple pigeon grass have spread and their sub-tropicals have thickened over the drought.

The pair are now looking towards running a much more integrated system based on higher crop frequency. They hope to utilise multi species crops and bring livestock into traditional grain lands.

It's all part of their focus on water efficiency.

"If you have got a fallow, like a chemical fallow, the water use efficiency of a fallow at best is going to be about 40 per cent but if you have got a green plant in the paddock when it rains, it's going to be up around 80 or 90 per cent," he said.

"For us having a plant in the ground ready to accept rain reduces the climatic risk, increases your water use efficiency.

"We will focus on a system that is less input, possibly less output but less risk because all we need is the green vegetation and you can turn it into dollars and that is where choosing your right animal for trade comes in.

Since implementing their new management approach and retaining ground cover, the Andersons have seen a number of pastures appear in areas they didn't seed.

Since implementing their new management approach and retaining ground cover, the Andersons have seen a number of pastures appear in areas they didn't seed.

"The grain production will be opportunistic."

Education has become another important part of their new business and they allocate a budget to ensure they can attend any event that may help broaden their understanding of running a profitable, reduced risk business.

They credit their operation's turnaround to the support and help of others.

"None of this has been us, it's just been ideas we picked up from other people," Mr Anderson said.

"You have got to make a decision with the best information you have at the time and monitor, monitor, monitor and as soon as you realise it's not going to work, do something about it.

"We have had more failures than we have had success but the key is chopping the head off before it turns into a real disaster."

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