Optimal management of fertiliser and stocking rate in temperate grazing systems

Phosphorus (P) fertilisers are one of the key tools available for increasing pasture production and the profitability of grazing enterprises. However, recent rapid changes in fertiliser price have increased the importance of developing optimal management strategies for applying P fertiliser and setting stocking rates. We applied a novel combination of process-based grazing systems modelling and randomised cash flow analyses to examine how changes in fertiliser price affect optimal fertiliser application rates and stocking rates for sheep grazing systems in south-eastern Australia, simultaneously taking into account long-term economic viability and environmental sustainability. We used 'GrassGro', a grazing systems decision support tool, to simulate three sheep enterprise types (Merino wethers, Merino ewes, crossbred ewes) at two locations (Hamilton, Victoria; Bookham, New South Wales). Gross margins from each year simulated in GrassGro (1966-2007) were randomised 500 times and input to a cash flow analysis that identified the financially optimal stocking rate for a range of fertiliser applications and the financial risk frontiers (combinations of stocking rate and fertiliser input for which the enterprise becomes financially unviable). For all enterprises examined at both locations, the optimal combinations of stocking rate and fertiliser application rate did not vary markedly as fertiliser price changed. Regardless of enterprise type or location, the fertiliser application rate at which the highest gross margins were achieved provided the greatest range of stocking rates that were both financially viable and environmentally sustainable. Increases in fertiliser price reduced the combinations of stocking rate and fertiliser application rate that were viable in the long term, emphasising the importance of well informed grazing management decisions.