However, this has been trumped at the 11th hour by a barrage of inquiries from my recent series of soil health workshops. Can we do the right thing by the planet and future generations, and make money too?
To answer this question properly, we need to understand the difference between profit and profitability.
It is one thing to reduce the costs — thus making higher profit on every litre — but another to be more profitable. This means making enough money in total to ensure your business, and you, continue to thrive.
It can be done. There are several peer-reviewed studies which demonstrate the profitability of regenerative farming.
A 2018 comparative analysis of 20 US corn growers over three years reported the regenerative system was nearly twice as profitable (+$130/acre) as conventional corn-growing despite having lower grain yields (-29 per cent).
Further, an economic analysis released by Boston Consulting Group and the World Business Council for Sustainable Development concluded that farmers could expect a 15 to 25 per cent increase in profitability after transitioning from conventional to regenerative agriculture.
The story is much the same in Europe. Fifty Belgian farms representing a diverse range of enterprises had the profitability of their farms examined over 2018-19. Those taking a regenerative approach were 30,000 euro/year (EBITDA) better off than conventional farmers despite reporting lower yields.
Back home, the data is a little murky.
The Graziers with better profitability, biodiversity and wellbeing report, reported that over the decade 2006 to 2016, NSW regenerative farmers often made more profit per kg of wool, lamb or beef than comparable conventional farms, however, diving a bit deeper we see their productivity was substantially lower and thus overall profitability (return on assets) was lower.
A big deal was made of the profit levels in dry years, and that in these, levels of regen farm profits were similar to those of the ‘elite’ producers. This is singularly due to lower stocking rate.
This highlights two critical points, particularly for Aussie farmers.
The first is that we have the most diverse (risky) agricultural landscape on earth, and so will expect much more variable responses to implementing regen ag practices ad hoc than elsewhere.
The second critical point is the journey from conventional to regenerative farming must preserve productivity (eg. total milk out the gate) while reducing pasture growing costs (less chemicals, fertiliser, fuel, labour), and be sustainable.
My own experience relates to our (4Sight’s) RESTORE program, which is a science-based, systematic application of proven regen ag practices.
It consistently delivers a 25 per cent increase in pasture growth, and a three-litre per cow increase in daily milk yield, taking care of the productivity concern.
The cost of production is also massively reduced by eliminating the need for P fertilisers, reduced N requirement by 49 per cent and dropped irrigation requirements by 39 per cent, and therefore, massively reducing pasture production costs.
So that’s a big yes from me on profitability.
Dr Les Sandles is a renowned thought leader and provocateur in the dairy industry. Best known for his role in revolutionising nutritional and pasture management practices, Les has turned his attention to the ‘last frontier’ — transmogrifying the forage production system into a C-munching machine.
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