Sunday, 8 April 2012

The Answer?

I knew I was going to like Fernando as soon as I received his second email. Anyone who can crack a joke, in a foreign language, which makes a person from another culture laugh, is always likely to be a good person, and so it proved.

Fernando Pacin was the man in charge of 'CREA Lamadrid', another farmer-led discussion group which consisted of ten farmer-members who all divulged their performance figures to each other and tried to learn from each other's experiences. The fact that I even met him was down to the usual Nuffield-charmed luck that seems to make things happen.

I had posted on a farming forum in the UK that I was planning a trip to Argentina and asked if any other forum members had contacts out there. Very kindly, someone I didn't know responded, saying he'd attended a conference in New Zealand the previous year and had 'had a couple of beers' with an Argentinian. He had dug out the Argentinian's card and gave me the email address. I sent this unknown Argentinian an email on the strength of the word of an unknown Englishman. The particular Argentinian couldn't help, but very kindly forwarded my email to half-a-dozen of his contacts who he thought may be able to help my studies. Fernando was one of them!

Occasionally, in life, you have meetings that are totally inspirational. Your mind starts racing, ideas flash through your brain, it's hard to concentrate with so many thoughts churning round inside your head. The meeting with Fernando was one of these occasions.

Fernando has an amazing ability to convey complex principles - even in a foreign language - in a simple way, sketching diagrams in his notepad to illustrate his point. I have a sheaf of papers torn (with his permission) from his notebook to help me remember the details of everything he said.

We started the day (after Fernando had collected me from my hotel and brought me to his home) with a powerpoint presentation on the region and the performance of his CREA group of farmers. Straight away, the limits of my knowledge were being expanded. Fernando started talking about the evapotranspiration potential of crops compared to available water from precipitation, combined with soil water availability. Pasture land, for example, has an ETP of 1,300mm (+/- 100mm standard deviation [SD]). Soybean, which is only in the ground for four months, has an ETP of 500mm, likewise maize of 650mm and wheat of 400mm.

The rainfall for the area, though, is only 800mm (+/- 250mm SD). This, coupled with soil water availability of only 75mm (+/- 15mm SD) meant that water was the limiting factor in crop and pasture growth. Everything that could be done to conserve water was of benefit.

(Given that Eastern England only receives c.650-700mm of rainfall annually and also in light of the run of dry years we're currently experiencing, it made me wonder why we don't have such figures at our fingertips. Maybe some farmers do - maybe it's just me! I will investigate on my return to the UK!)

Fernando also talked about uplands and lowlands. These are not as we know them. The average land in his area is 170m above sea level. The uplands are c.1m higher and the lowlands are c.0.5m lower. This sounds like a ridiculously small variation to bother with but in actual fact it is a critical distinction. The lowlands collect rainfall which can take up to twelve days to drain away. This means that crops, alfalfa and improved grasses cannot survive there. Consequently, the 'lowlands' - small depressions in the flat landscape - are uncropped and grow tough, native grasses.

The uplands, however, are free draining and so are suitable for growing crops. This leads to a patchwork quilt-effect of cropped and uncropped areas across the land, with electric fences dividing the areas to allow cattle to graze.

Such topography encourages the keeping of livestock, as there is little alternative use for the lowlands. Fernando explained to me that the lowland area determined how many suckler cows were kept, stocking this area to capacity with cow-calf pairs. This in turn determined the number of fattening cattle they would have and so allowed the farmer to work out the area of upland needed to be put into pasture to fatten the weaned calves - in other words cows on the lowlands, fatteners on the better quality uplands.

Fernando talking to the farm manager of the first farm we visited (as he commented, the manager's of 'gaucho' blood). Fernando's son, Manuel, is standing to the right holding a cup of mate, the traditional shared drink of the area. The darker green area behind the group is the cropped land, whilst the lighter green area just below the horizon above the truck is a lowland area of native grasses


Cows tend to be around 400kg - much lighter than in the UK - and are almost exclusively either hereford or angus breeds. At weaning at c.6 months old, the calves weigh in at 180kg (45% of dam's weight). They graze cover crops, mainly of triticale, through the winter months (April to August) following weaning before moving on to pastures in spring (September), reaching finished condition by the time they are sold from January onwards. Average weight gain post weaning is c0.75-0.80kg/day meaning the calves weigh around 400kg at slaughter at c.16 months old - again much lighter than in the UK, though they were all of the right condition (ascertained by looking at them on the hoof and by examining the resultant beef in many restaurants during my trip!)

Some of the angus fatteners almost ready for sale. The windmill in the background pumps water for the livestock


The pasture was a mixture of alfalfa, cocksfoot (dactylis glomerata) and/or fescue. Although predominantly forage-fed, the fattening animals may get a little corn (maize corn) to keep them growing at the target speed - ideally not, but if forage quality is poor for whatever reason, the fatteners will be given extra corn.

The cows graze the 'rustic' grasses in the lowlands through the summer months which provide excellent quantities and quality of feed, most suited to sucklers. Following weaning in March, and during the winter months of April to July, the cows graze sorghum before moving back onto the lowland pastures as calving starts again in August.

Like all of the Argentinian farms I saw, it's a very simple system with no sheds, machinery or other equipment needed, save for fencing and a corral. The gauchoes ride round on horseback tending the cattle, which tend to be in groups of up to 350 head (considered to be the largest sized herd one man can look after).

Within the CREA group, the average size of the cattle enterprise was 40% of the total business for each of the ten farmer members, indicating that cattle were an important part of the enterprise mix. Part of the reason for this was, as in the UK, "corn up, horn down" and vice versa. The livestock often counterbalanced the cropping, making for a much more stable net profit when considered over the medium to long term. Of course, another driver was the existence of the 'lowlands' which weren't suited to crop production.

Another reason was the relative stability of livestock gross margins (gross margin figures are calculated after deducting all direct costs including labour costs directly apportioned to the enterprises). Fernando had detailed analyses of many aspects of the CREA group members' businesses. One of these was the swing in gross margins for different enterprises between good and bad years. Meat production had a gross margin swing of 56% whilst maize was the worst at 107% (reflecting the relatively shallow soils in the area, unsuited to maize's growth habits).

In an average year, the group would expect a gross margin of U$D234/ha from livestock whilst in a worst case scenario - a drought year where 40% of youngstock had to be finished in feedlots - the gross margin falls to U$D116/ha. By comparison, in the good years cropped land is much more profitable (gross margin of U$D438/ha) but in drought years the gross margin fell to just U$D8/ha. (Not surprisingly dairying showed the greatest gross margin of all, at U$D853/ha falling to U$D459/ha in a drought year, but the high levels of initial investment required plus the lack of a skilled dairymen in the area meant few farmers considered this option)

One of the very few dairy herds in the region. This one was only set up two years ago and took high levels of investment, met in part through the sale of a herd of suckler cows. Although the cows are holsteins, the system is predominantly forage based, all year round calving, with a flat-rate top up of concentrates in the parlour during the twice a day milking. I asked why, given the reliance on forage, they hadn't chosen a more suitable animal - a smaller New Zealand-type cow with maybe Friesian or Jersey bloodlines. The answer is that they are few and far between in the country and would be very hard to source, given that  the herd is only a couple of years old.


Financialy, the CREA group was showing an average return on capital over a 13-year period of 4.7% and an average return on tenants capital (before tax and drawings) of 21.8%. Net profit as a proportion of turnover averaged 29.6% and average annual turnover was 13% of all capital invested. Ignoring for a moment the high taxes and generally volatile politics in the country, these figures make such farms seem rather attractive investments.

Analysing the nitrogen balance of the farm was something else relatively new to me - a few years ago I did hear of one consultant who was doing this in the UK but as far as I know it is not a common calculation. The basic premise is that the nitrogen 'removed' from the enterprise is worked out (eg through corn or livestock sales), and the amount of nitrogen added to the system, either through applications of artificial N or through leguminous fixation of N are also calculated to give a net balance for the enterprise.

The nitrogen balance for the arable crops on a CREA group farm. The column on the left represents how much N was extracted and sold (crop sales). The next column is the artificial fertiliser added, followed by the N fixed by leguminous plants (in this case soybean). The right hand column is the net balance between the inputs and outputs.

This chart represents the farm's N balance. The deficit in N shown in the left hand column is from the arable crops, as per the first table. The central colum is the livestock, demonstrating the high levels of N-fixing alfalfa in the pastures used for the livestock enteprise. The right hand column shows the surplus N available within the rotation as a result of having a combination of cattle and crops.

The surfeit of nitrogen within the rotation as a whole has a real financial value. It is nitrogen locked up in the soil organic matter, available to plants under the right conditions and as a consequence, for the first two crops following pasture, no additional artifical nitrogen is applied.

Fernando had also analysed the net profitability of farming systems based on various different scenarios for upland (cropping ground) usage, including:
  1. Pasture land for 4 years followed by 4 years of cropping (ie 50% crops, 50% livestock)
  2. Pasture land for 4 years followed by 6 years of cropping
  3. Pasture land for 4 years followed by 8 years of cropping
  4. Pasture land for 4 years followed by 10 years of cropping
  5. Pasture land for 4 years followed by 12 years of cropping (ie 75% crops, 25% livestock)
  6. Permanent cropping on all land suitable for such use
The above chart shows the expected net margins achievable from the different cropping regimes before allowing for any reduced N usage.

This graph includes the value of the stored nitrogen within the margin. As can be seen, the far right column (continuous cropping) shows by far the worst net margin of all the options. With the higher returns from crops, but with the value of N from the livestock pastures, there is little to choose between having pasture for four years and crops for six years and having a 4yr:10yr mix of pastures and cropping.

What the above graphs do not take account of is the soil organic matter changes expected under the different pasture:cropping regimes. Fernando forecast the change in soil organic matter (from a 4% total Soil OM) over a 40-year period as follows:

Soil Organic Matter losses under the different cropping regimes (all crops being direct drilled). Unsurprisingly, the 4x4 regime, losses are least (forecast to fall by 1% from 4% Soil OM to 3.96% over the 40 year period. The permanent agriculture system has forecast losses of 11%, taking the soil OM down to just over 3.5% at the end of the 40 year period.

In a low rainfall region, preservation of soil organic can be critical, given its ability to improve water infiltration during rains then to hold onto the water, like a sponge, during dry periods. The above graph suggests aiming for a 4x4 or 4x6 mix of pasture and crops may be the most desirable for soil organic matter reasons.

None of the farms in the group were practicing mob grazing. Given its potential to build organic matter in the soils, as seen during my earlier travels, maybe the results could be even more impressive for farms where animals are included in the rotation.

Had I finally found the answer to my question of "Are mob grazed cattle the perfect arable break crop?". I suspect I had. Thank you Fernando!

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    Thanks.......

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