P.PSH.2006 - PDS: Value Chain Economics for Leucaena

Summary

Leucaena offers the opportunity for producers to dramatically improve their productivity and increase stocking rates resulting in increased economic security and enterprise viability; as well as expanding the options for turnoff into supply chains where weight requirements were unable to be met due to feed availability or quality.

This Value Chain Economics for Leucaena in Northern Australia project aimed to demonstrate both productivity and financial returns at the producer level.

Three demonstration sites (Mt Garnet and Pinnarendi in North Queensland, and Douglas Daly in the Top End of the Northern Territory) undertook liveweight gain trials with established Leucaena grass pastures.

The economic outcomes of three demonstrations undertaken across Northern Australia were modelled. The primary purpose was to understand Leucaena profitability for each geographical area which generally target different cattle markets.

The demonstration site outcomes were complementary to the productivity gains experienced in the more established Leucaena growing areas. The project determined that average daily liveweight gains throughout the year ranged from 0.605kg/head to 0.515kg/head compared to native pastures in these regions which ranged from 0.03kg/day to 0.05kg/day. The introduction of Leucaena into an appropriate grazing system has the potential to improve the enterprise’s gross margin by up to 324%.

Objectives

By June 2023 the PDS activities will:
1. Quantify the liveweight gain productivity of established leucaena-grass pasture systems at the three sites located in North Queensland and the Northern Territory.
2. Determine the economic benefits on a whole of farm basis, of the inclusion of leucaena – grass pastures for the three sites at turn off for the alternative markets of slaughter (~600kg), feeder cattle (~450kg) and live export (~350kg) for dissemination to industry.
3. 10% of observer producers will have adopted leucaena-grass pasture grazing systems.
4. 70% of observer producers will have increased their knowledge and skills of the establishment and management of Leucaena-grass pasture grazing systems as measured through pre and post event surveys.

Key findings

• In situations with the required soil properties and climate, Leucaena was shown to have the potential to increase the carrying capacity of paddocks planted to Leucaena by up to four times, and on average, over a twelve-month duration would support average daily weight gains of 0.5kg/d per head. This compares favourably to most native pastures found in northern Australia where average daily live weight gains of 0.03kg to 0.05kg per head are reported.
• Leucaena has the potential to dramatically improve the gross margin of a grazing enterprise, between 144 to 324% on younger plantings of less than ten years and under good management.
• Leucaena that is aged and with reduced plant density of more than half the original plantings will continue to provide productivity benefits to a grazing system with but with an improved gross margin reduced to approximately 32%

Benefits to industry

• The results of the three demonstration sites, located in different climate and soil types across northern Australia, consistently reinforced the potential of well-managed Leucaena grazing systems to improve a grazing enterprises productivity and profitability.
• Fiscal assessment of the improved gross margin through the adoption of Leucaena-grass pastures addresses the key concern of many potential Leucaena producers, being the perceived high cost of establishment and returns on that initial investment.
• The consistency of weight gains throughout the year, and particularly towards the end of the dry season demonstrates the capacity of Leucaena to be a dry season/drought tolerant source of protein supporting animal productivity.

MLA action

MLA continues to deliver the Producer Demonstration Site (PDS) program, supporting livestock producers working in peer-to-peer groups to pursue new skills, knowledge and management practices applicable to their own commercial livestock production systems.

Future research

The group identified that the key recommendation from this project is that best management practices for the long-term productivity of Leucaena-grass pastures – fertilising and cutting regimes, be further developed and documented for northern beef producers to achieve the most effective grazing strategies for optimum productivity and sustainability.