The bioeconomic implications of various stocking strategies in the semi- arid savanna of Natal.

Thesis (Ph.D.)-University of Natal, Pietermaritzburg, 1994.

Climatic and market uncertainty present major challenges to livestock producers in arid and semi-arid environments. Range managers require detailed information on biological and economic components of the system in order to formulate stocking strategies which maximise short-term financial risk and minimise long-term ecological risk. Computer-based simulation models may provide useful tools to assist in this decision process. This thesis outlines the development of a bioeconomic stocking model for the semi-arid savanna of Natal. Grazing trials were established at two sites (Llanwarne and Dordrecht) on Llanwarne Estates in the Magudu area of the semi-arid savanna or Lowveld of Natal. The Lowveld comprises a herbaceous layer dominated by Themeda triandra, Panicum maximum and P. coloratum and a woody layer characterised by Acacia species. The sites differed initially in range composition. Llanwarne was dominated by Themeda triandra, Panicum maximum and P. coloratum, while Dordrecht with a history of heavy stocking was dominated by Urochloa mosambicensis, Sporobolus nitens and S. iocladus. Three treatments were stocked with Brahman-cross cattle at each site to initially represent 'light'(0.17 LSU ha-'), 'intermediate' (0.23 LSU ha-') and 'heavy' (0.30 LSU ha-') stocking. Data collected at three-week intervals over seven seasons (November 1986 to June 1993 or 120 measuring periods) provided the basis for the development of a stocking model LOWBEEF - OWveid BioEconomic Efficiency Forecasting) which comprised two biological sub-models (GRASS and BEEF), based on step-wise multiple linear regression models, and an integrated economic component (ECON). The GRASS model predicted the amount of residual herbage at the end of summer (kg ha-') and the forage deficit period (days) over which forage supplementation would be required to maintain animal mass. Residual herbage mass at the end of summer (kg ha-') was significantly related (P < 0.01) to cumulative summer grazing days (LSU gd ha-'), rainfall (mm) (measured 1 July to 30 June) and range condition (indexed as the sum of the proportions of T. triandra, P. maximum and P. coloratum). The forage deficit period (days) over which herbage mass declined below a grazing cut-off of 1695 kg ha-' was significantly related (P < 0.01) to residual herbage mass at the end of summer. The BEEF model predicted the livemass gain over summer (kg ha¯¹) which was significantly related (P< 0.01) to rainfall (mm) stocking rate (LSU ha¯¹) but interestingly not to condition. The economic component (ECON) reflected the difference between gross income (R ha¯¹) and total costs, which were based on fixed and variable cost structures (using 1993 Rands), including demand-related winter costs, to reflect net returns to land management (R ha¯¹). A conceptual model of range dynamics based on three discrete states, was to developed to summarise the effects of rainfall and stocking rate in semi-arid savanna. State 1, characterised by iocladus and S. nitens, was associated with heavy stocking. Movement towards State 2, characterised by T. triandra and P. maximum, was associated with periods of above-average rainfall. Drought conditions, which comprised a major system disturbance led to stability at State 3, dominated by U. mosambicensis. Post-drought recovery was influenced by predrought composition and stocking levels where tuft numbers, basal cover and seedbank were significantly reduced by increased stocking within a sward dominated by species of low stature such as Aristida congesta subsp Urochloa mosambicensis, Sporobolus nitens, Sporobolus iocladus and Tragus racemosa. It was suggested that extensive soil loss may lead to stabilisation across an irreversible threshold at a forth state characterised by shallow species such as Tragus racemosa Aristida congesta subsp. congesta. Sensitivity of optimum economic stocking rate net return to price and interest rate fluctuations, and wage and feed cost increases were examined for various rainfall and range condition scenarios. Net return and optimum economic stocking rate increased as rainfall and range condition increased through the effect of increased residual herbage mass at the end summer, decreased forage deficit periods and reduced supplementary feed costs. Net return was highly responsive to changes beef price where an increase in beef price led to an increase in optimum economic stocking rate and net return. The effect of reduced prices may be compounded by dry where supply-driven decreases in price may occur. This suggested that for dry seasons the optimum stocking rate was the lightest within the range of economic stocking rates. Although an increase in interest rates would increase variable costs and lead to reduced returns, the influence of interest rates on enterprises will vary in relation to farm debt loads. Increased labour costs would result in a corresponding decline in net return although optimum economic stocking rate would remain unaffected. Increased supplementary feed cost had little influence on net return relative to the effect of demand-driven increases in feed costs as rainfall decreased. The distribution of net returns for stocking strategies of 0.20, 0.30 and 0.40 LSU ha¯¹ and climate-dependent stocking (where stocking levels were varied in relation to rainfall and hence forage availability) and range condition scores of 10, 50, 80 and a dynamic range model were examined for a 60 year rainfall sequence (1931-1991). While a range score of 10 would see residual herbage mass decline to below a grazing cut-off of 1695 kg ha¯¹ before the end of summer, a range score of 80 suggested that, irrespective of stocking strategy within the range investigated, herbage would not become limiting. This suggested that irrespective of stocking strategy a range score of 10, established across an irreversible soil loss threshold, would reflect accumulated losses over the 60 year period. In contrast, a range score of 80 would lead to positive accumulated returns. A dynamic range model (where range composition was related to previous seasons rainfall) and a climate-dependent stocking strategy, suggested that herbage would not become limiting by the end of summer and forage deficit periods would be restricted to an average of 88 days per year. Such an approach would yield a higher accumulated cash surplus than fixed stocking strategies. Incorporation of stochastic rainfall effects allowed the development of cumulative probability distributions based on 800-year simulations to evaluate the risk associated with various stocking strategies. Range condition played a major role in determining the risk of financial loss where decreased range condition was associated with enhanced risk. An increase in stocking rate resulted in increased variability in returns. Although the risk of forage deficits and financial losses may be reduced with lighter stocking, this may be at the cost of reduced returns during wetter seasons. Increased stocking may increase the probability of higher returns during wetter seasons although this may at the cost of increased risk of forage deficits and highly negative returns during dry seasons. Importantly, ecological risk may increase as stocking is increased. A flexible or climate-dependent strategy, where stock numbers are adjusted according to previous seasons rainfall, combine financial benefits of each approach and reduce financial risk. Although errors may carry high ecological costs where, for example, the effect of an above-average rainfall season would be to increase stock numbers into a subsequent dry season, the probability of incurring such error was low. Current livestock production systems in the semi-arid savanna of Natal based on breeding stock may not be appropriate in a highly variable environment where low rainfall may require extended periods of upplementary feeding or force the sale of breeding stock. A change in emphasis from current systems to a mixed breeding system, where the level of breeding stock would be set at the optimum economic stocking rate for drier seasons, may decrease both financial and ecological risk. Growing stock may either be retained or purchased during wetter seasons to reach the optimum economic stocking rate for such seasons. although growing stock may display a greater tolerance to restricted intake (during dry seasons) than would breeding stock, additional growing may be rapidly sold in response to declining rainfall with no influence on the breeding system. Integration of wildlife into current cattle systems may be an important means of reducing financial risk associated with variable rainfall and profitability and ecological risk associated with woody plant encroachment.