Downturn forces changes on Lincoln’s Ashley Dene

Press, 25 July 1986, Page 13

Downturn forces changes on Lincoln’s Ashley Dene

By

HUGH STRINGLEMAN

Cost cutting and some changes in management policy are necessary for the Lincoln College light land sheep farm Ashley Dene to avoid further losses, according to the supervisor of the farm, Mr Rod Plank.

Ashley Dene has been hit by a $46,000 reversal during the last two years — from $13,000 surplus in 1984-85 to an anticipated $23,000 deficit in 1985-86. The figures to June 30, 1986, are not quite finalised yet.

Mr Plank, a farm management lecturer at the college, said cost cutting on the expenditure side was designed to bring the farm back into surplus in the financial year just begun, despite a further $ll,OOO budgeted drop in gross income.

A $32,000 cut in expenditure could bring the 1986-87 budget down to a deficit of around $2OOO, he said, which was an effective surplus when the costs of some of the research and teaching work on the farm were taken into account.

Some farmers recently crticised the college for not allowing a complete disclosure of the assumed losses on the different college farms. Political mileage in publicising these losses is obviously anticipated by these critics, along the lines of "if Lincoln can’t balance its books then ...” Professor Bruce Ross, the principal, has said that the college farm accounts need qualifications and explanations because of the special conditions that apply.

Anxious to defend its good record in extension to farmers, Lincoln has moved through Mr Plank to reveal the financial and managerial position on

Ashley Dene and to seek outside help in deciding what to do.

The Farm Management department of the college called a meeting early in July when more than 30 people with special skills were invited to contribute to a seminar on the future policy options for Ashley Dene. They covered pastures, fertilisers, diseases, stock and cropping policies.

Mr Plank spoke on the farm, explaining that it covered 355 ha of Balmoral soils, with 68 ha irrigated, 3350 stock units (10.13 per ha), and had a 1983 capital value of $850,000.

He drew attention to the reduction in stock numbers by 1000 units in the last two years; the reclassifying of much of the farm’s soils from Lismore to Balmoral; the low level of reinvestment, the high costs of irrigating and the demands of the sheep breed comparison and Booroola trial work undertaken. The main constraints which Mr Plank had distilled from these factors were:

• Barley and wheat production in the light Balmoral soils was not going to be profitable in all but the most favourable of seasons. The water withholding capacity of the soils was just not good enough.

• Irrigation did not extend over a sufficient area of the farm, nor did water return quickly enough for intensive crop production. • The dry autumns did not offer the opportunity for large numbers of heavyweight lambs at that time.

He also presented the accounts and the budget which showed a reduction in lamb returns from $76,500 (1984-85) to $49,800 (1985-86) to $46,620 (1986-87 budget); in sheep returns from $lO,lOO to $l5OO to $1850; wool returns down from $54,100 to $47,600 to $38,400; and crop returns up from $5500 to $10,200 to $11,070.

The total income therefore dropped from $146,200 in 1984-85 to $109,100 last financial year and $97,940 this year.

That substantial drop in income was not initially matched by a remedial cut in expenditure, which was maintained almost unchanged at $133,000 in 1984-85 and 1985-86. Only in this financial year, 1986-87, has Ashley Dene cut its cloth and reduced expenditure by a budgeted 25 per cent, down to $lOO,OOO.

Wages have been reduced 29 per cent, vehicle expenses 37 per cent, fertiliser expenditure wiped apart from soil tests, con-

served feed expenses down 44 per cent, and some smaller reductions in administration expenses and repairs and maintenance.

The farm’s specialisations in the last few years have been: large lucerne areas (up to 180 ha) for silage, grazing and hay; silage production (up to 40ha cut annually and 600 tonnes in store now); strategic use of a small irrigation unit; new pasture species tama and Moata for high quality summer feed; higher lambing percentages and some light land barley growing, tending to autumn-sown in the last few years. Policy and management options suggested during the early July seminar included more specialist pasture grasses, overdrilling of run-out lucerne, control of lucerne weevil for longer stand life, control of the expanding horehound weed problem, some cattle, some goats, a deer unit, more production of good quality lucerne hay for sale and some specialist heavy, lean lamb production. Mr Plank, who took all the suggestions on board, commented afterwards that the practical ones in particular were valued. Mr Tom Fraser, of the Crop research division of the D.5.1.R., suggested new fescue and prairie gross varieties and overdrilling in spring of high endophyte ryegrass and new white clover into sixyear lucerne stands. The spring drilling would help avoid problems with the dry autumns and the overdrilling would extend the life of forage stands by four or five years and cut costs of new pasture replacement. The standard rotation on the large cemetery and main.blocks is old lucerne to greenfeed to turnips to new lucerne or lucerne to summer forage to greenfeed to lucerne. Dr Stephen Goldson, of the M.A.F. at Lincoln, outlined his work on sitona weevil damage to lucerne

and confirmed the college in its recent decision to spray the one and two year stands during autumn to control the pest. Dr Goldson has also released on Ashley Dene the parasitic wasp for biological control.

Mr Plank said that he was keeping an open mind on cattle and goats. Up to 1000 units in goats was suggested by Mr Chris Wright, a Dunsandel goat farmer, but Mr Plank doubts the fencing and yards would be good enough for this. More widespread deer production on several college farms has been suggested in the wake of the livestock taxation changes, which have taken the tax advantage out of deer — something the college could not use. A stag fattening programme would be a distinct possibility for Ashley Dene because the winterspring growth pattern suits the requirements of stags.

Proximity to Christchurch and the horse racing industry created an opportunity for lucerne hay sales, said Mr Plank. Another option is to buy store lambs in the late autumn and grow them through the winter and early spring, when feed is not now a problem due to lower stocking rates and silage, and sell them at heavy weights in October and November.

It was planned for this year but store lambs were not available at low enough prices to make a reasonable profit.

As an indication of the lighter stocking and good season Ashley Dene turned off 3443 lambs at an average carcase weight of 15.5 kg and $14.07 return. Last year it produced 3386 lambs at 13.3 kg for $22.58 each. After this very useful seminar the college has also decided to cast its net for advice still wider, by seeking suggestions for the future of Ashley Dene from up to 100 similarlyplaced farmers. Mr Plank will be writing with questionnaires in a- few weeks.