A high return, low risk investment

Like many aspects of farming, the choice of which pasture seed to sow should focus on maximising returns, not just minimising costs. 

 

Facts


Pasture seed developed through modern breeding and research programs will cost more than old common varieties. 

This is because they will deliver greater returns than the additional cost of the seed cost. The additional cost goes to funding ongoing research to continually develop new and better performing varieties that will deliver greater on farm productivity.

 

The extensive breeding and research process identifies the very best performing varieties but before we release a variety, this performance must be consistent over many locations and multiple years. This consistency of results reduces the risk associated with choosing a research based variety.

 

Example 1 - Annual Ryegrass in dairy farming


Tetila annual ryegrass (old common variety) vs Arnie annual ryegrass (new research based variety).

 

Seed Cost

   Tetila  Arnie  Difference
Sowing Rate (kg/ha)  30  25  5
Seed Cost ($/kg)  $1.50  $4.00  $2.50
Seed Cost ($/ha) $45 $100 $55

 

If the decision is based solely on seed cost, Tetila wins but it is essential to look at the return on investment.

 

Return on Investment

    Tetila  Arnie  Difference
Yield (kg/ha)  7000  8050  1050
Utilised Yield (75%)  5250  6040  790
Milk Produced (litres)  5250  6040  790
Milk Income (40cpl) $2,100   $2,416  $316
Net Profilt  $2,055  $2,316  $261

 

An additional $55/ha invested in a new research based pasture variety such as Arnie can return an additional $261/ha (after the additional seed cost is factored in). This is a 375% return on investment.

 

Assumptions

 

15% yield advantage Arnie vs Tetila (breakeven point is 2% yield advantage)
Yield advantage demonstrated in multiple research trials
1kg of yield = 1 litre of milk
Other sowing costs the same for both varieties.

 

Example 2 – Perennial ryegrass in dairy farming


Victorian perennial ryegrass (old common variety) vs Bealey perennial ryegrass (new research based variety).

 

Seed Cost