Economic benefits of mechanical soil aeration to alleviate soil compaction on a dairy farm

Figures & data

Table 1 Annual farm information (2010/11) for the North Otago Rolling Downlands dairy farm.

Variables	Parameters
Farm information
Effective area (ha)	140
Pasture production (kg DM/ha)	20,263
Stock wintered
Milking cows	376
In-calf milking heifers	94
Animal production parameters
Stocking rate (cows/ha)	3.3
Milk solid production per cow (kg/cow)	411
Assumed milk value ($/kg MS)	6.00
Total pasture demand (t DM/herd; base farm)	2432
Pasture demand per cow (kg DM/cow; base farm)	6140

DM, dry matter; MS, milk solids.

Table 2 Livestock value (per cow milked). Calculated based on data from the Inland Revenue Department national average market value 2012 and considering the cost of annual herd replacement.

Animal	Value ($)
Rising 1-year heifers	1234
Rising 2-year heifers	1806
Mixed-age cows	2155
Milking cows	2085
Replacement cows^1	246
Total capital value per cow milked^2	2332

¹Based on a replacement rate of 20% p.a.

²Incorporating the cost of replacement cows.

Table 3 Whole farm investment analysis of the base farm with and without aeration of 20 ha of winter forage crop area after 3 consecutive years of grazing.

	Base farm ($)	Farm + 20 ha aerated ($)
Capital investment
Cows ^1	153,912	174,421
Aeration	0	3300
Annual profit
Year 1	52,085	76,284
Year 2	52,085	66,891
Years 3–12	52,085	52,085
Net present value^2	494,807	508,699
Annuity (per year)^3	48,237	49,592
Annual change in farm profit
$/farm/year	–	1354
$/year/ha aerated	–	67

¹Cow value as in Table 2.

²Based on discount rate to service loan of 2.5% per annum.

³Across 12 years, based on a discount rate of 2.5% per annum.

Table 4 Minimum increase in pasture production (kg DM/ha; relative to non-aeration) below which an economic gain from mechanical soil aeration is no longer realised. Included in the analysis is a range of milk sale prices.

	Milk sale price ($/kg milk solids)
Year	$7.00	$6.00	$5.00	$4.00
Year 1	400	520	740	930
Year 2	177	230	325	410

It is assumed that 56% of the total pasture produced during a 2-year period will be grown in the first year, while the remaining 44% will be grown in year 2. This corresponds to the pattern of pasture production reported by Laurenson & Houlbrooke (2014).

Laurenson S, Houlbrooke DJ 2014. Assessing the agronomic benefit of non-inversion tillage for improving soil structure following winter grazing of cattle and sheep. Soil Use and Management 30: 595–602.

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