Forage crop gross margins

• All calculations are ex-GST.
• Livestock price information is sourced from the MLA Market Database in March or April 2025.
• A purchase price or initial value (where they have been bred on-farm) is applied to all livestock to allow the value of grazing the crops to be evaluated.
• Vaccines, drenches, supplementary licks, transport and selling costs are included.
• Labour is not included. This is usually accounted for at either an enterprise level or a whole farm budget level. However, producers should consider that labour requirements can differ substantially between scenarios, particularly where rotational grazing management or specialist machinery is required.
• Additional benefits, such as spring grazing breeding stock, hay production, or other system benefits are not included but may be relevant to some operations. For example, brassica-legume mixes without a cereal or grass may provide a disease break in a cereal cropping system.

• Weed control is assumed to have been conducted prior to sowing to minimise early competition and ensure successful crop establishment. This includes the use of fallow herbicides, where applicable, to reduce the early weed burden and conserve soil moisture. A pre-sowing herbicide mix is included in the budget however the specific products used will depend on paddock history, expected weed spectrum, and the pasture/cropping rotation.
• Sowing is assumed to occur in March (April for wheat only) into sufficient moisture and a suitable seed bed allowing for good establishment of all species prior to grazing.
• Seed is assumed to be of good quality and pre-treated to prevent disease.
• Optimal grazing management is assumed for the purpose of the enterprise, e.g. rotational or strip grazing to reduce spoilage, maximise regrowth, and extend the productive life of the forage crop. Overgrazing is avoided to preserve grain recovery and soil structure.
• Stocking rates are assumed to match expected growth potential of the forage crop, preventing over- or underutilisation.
• Where grain recovery is part of the system it is assumed that grazing will cease in July to allow plants to recover adequately and complete their reproductive phase. Grain recovery was assumed to be 2.0 t/ha for wheat sown alone at 70 kg/ha, and 0.8 t/ha for wheat sown at 40 kg/ha in a mix.
• Topdressing (urea) is included in grain recovery budgets, reflecting common practice to support grain production post-grazing.
• An end of season knockdown herbicide is costed to terminate the forage crop effectively and manage weed set. Consult an agronomist to select the most appropriate herbicide strategy.
• In-crop fungicides and insecticides for crops being taken through to grain have not been included in the budget.

• First cross lambs, purchased at 30 kg/head liveweight for $82.93/head, based on MLA Light Lamb Indicator prices as of 21 March 2025 https://www.mla.com.au/prices-markets/sheep/lightlamb/
• 1% mortality
• Crutching included in variable costs
• Livestock selling cost of 6.5% (agents fees, yard dues, transaction levy)
• Weight gain 250 g/head/day
• Stocking rate^#
  • Graze only budgets – 22 lambs/ha
  • Graze and grain budgets – 20 lambs/ha

^#Stocking rates were calculated to match the total forage available over the grazing period to the lamb feed requirements. Graze only scenarios carry a higher stocking rate throughout the grazing period than graze and grain which must be managed to preserve grain recovery.

• Grazing days*
  • Northern NSW, mix, graze only – 125 days
  • Northern NSW, oats, graze only – 95 days
  • Southern NSW, mix, graze only – 115 days
  • Southern NSW, mix, graze and grain – 90 days
  • Southern NSW, wheat, graze and grain – 60 days

*Grazing days differ to account for different sowing dates and grazing end dates dependent on location and forage composition. Graze and grain budgets should be locked up in late-July or early-August for grain recovery where mixed graze only budgets may continue grazing through to September or later in good seasons.

• Steer breed and growth potential is not accounted for; the sensitivity table on weight gains can be used to address these variables.
• Yearling steers, purchased at 270 kg/head liveweight for $1,068/head based on MLA feeder steer indicator prices as of 9 April 2025 https://www.mla.com.au/prices-markets/cattle/feedersteer/
• 1% mortality.
• Weight gain 1.3 kg/head/day
• Stocking rate^#
  • Northern NSW, mix, grazing only – 4.0 steers/ha
  • Southern NSW, mix, graze and grain – 3.8 steers/ha

^#Stocking rates were calculated to match the total forage available over the grazing period to the steer feed requirements. Graze only scenarios carry a higher stocking rate throughout the grazing period than graze and grain which must be managed to preserve grain recovery.

• Grazing days*
  • Northern NSW, mix, grazing only – 125 days
  • Southern NSW, mix, graze and grain – 85 days

*Grazing days differ to account for different sowing dates and grazing end dates dependent on location and forage composition. Graze and grain budgets should be locked up in late-July or early-August for grain recovery where mixed graze only budgets may continue grazing through to September or later in good seasons.

The gross margin results are sensitive to several key parameters, particularly the difference between the livestock purchase and sale prices, weight gain per day, stocking rates, crop yield and prices, and the number of grazing days assumed. Mixed forage crops are most profitable as they provide a longer period of grazing and therefore greater weight gain:

• The highest gross margins were for lambs on a mix of oats and other species without grain recovery, due to the longer grazing period resulting in heavier lambs than the other gross margins. The longer grazing period assumed from mixes for graze only budgets offered greater value than the assumed grain recovery available in the graze and grain.
• For the northern NSW lamb budgets, the assumed longer grazing period on the mixed forage crop (125 days) as opposed to the single species oats (95 days) resulted in a higher gross margin due to heavier lamb weights at sale. For producers in suitable environments this indicates that diversifying the forage crop using appropriate species and management could deliver moderate profitability gains.
• For the southern NSW graze and grain lamb budgets, the mix returned a gross margin similar to wheat. It demonstrates that a mixed crop can perform at least as well as a traditional cereal option, with the potential for added benefits such as greater flexibility in dry seasons or reduced weed pressure. Mixed species forage crops can be a viable alternative, however, differences in labour and management requirements should be considered.
• Both the southern and northern cattle budgets present lower profitability compared to lambs on the same mixes. This is driven by the length of the grazing period. Unlike lambs, steers cannot be grown to ideal finish weights within the grazing available from one forage crop.

The differences in gross margins between cattle and sheep reflect the different stocking rates, weight gain assumed, typical turnoff periods, and relative commodity prices. A hard conclusion should not be drawn that lambs will always outperform cattle. It does highlight the importance of matching the forage crop used to the class of livestock and ensuring effective management of stocking rates and grazing.

While these gross margin budgets offer a useful guide, they are based on assumed values and in some cases a single season of data. Livestock prices, liveweight gain, management and seasonal conditions can significantly alter outcomes. Therefore, these gross margins are best used to test what-if scenarios (e.g. different stocking rates or weight gains) and identify management areas that could be refined to improve returns.

NSW DPIRD - Livestock gross margin budgets

https://www.dpi.nsw.gov.au/agriculture/budgets/livestock

MLA – Prices & Markets

https://www.mla.com.au/prices-markets/

NSW DPIRD – Weekly Commodity Report

https://www.dpi.nsw.gov.au/agriculture/commodity-report