Shelter Investment tool

The Shelter Investment tool was developed for Merino-lamb producers across the high rainfall zone of southern Australia. 

This tool will help you to determine the financial benefits of providing shelter to increase lamb survival. It also provides data on net profit from investment in shelter over the lifetime of the shelter. 

 

Read about our selection process for including tools on Climate Kelpie

 

Who this tool is for

Lamb producers across southern Australia’s high rainfall zone, specifically those breeding lambs from Merino ewes and sires. The tool does not cover lambs born to crossbred ewes.

Building shelter will be a worthwhile investment on your property if all these apply:

  •  you are in a location with high risk of chill 
  • you have a significant number of twin lambs
  • you have limited or no existing natural shelter
  • shelter belts suit your farm management.

The economic benefits of shelter do vary between regions: those with the greatest benefits are the tablelands of New South Wales, south-western Victoria and exposed parts of Tasmania.

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Questions this tool answers

  • What are the financial benefits of shelter at my locality?
  • Will vegetative shelter work for me?
  • How can I make my shelter effective?
  • How much shelter do I need to reduce lamb mortality?
  • What are the risks of not providing shelter?
  • How do temperature, wind and rainfall influence these risks?
  • What other benefits are there of increasing my shelter?

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What this tool does

The tool enables you to determine the locations and months of lambing where your investment in shelter will show a good return. 

Overall, the industry considers an investment in shelter to offer significant benefits, especially in high risk areas.  

How much financial return you gain from shelter will depend on the degree of chill risk you have during the lambing period, the cost of the shelter itself and the rates of conception and survival on your property.

In south-eastern Australia, for example, financial benefits are considered greatest in areas that are wet and windy at lambing time (i.e. where the greatest number of flocks lamb between June and September). 

In high risk areas, such as Hamilton, Victoria, cold, wet and windy weather during these months can result in a greater number of days experiencing bad chill, which affects the level of benefit achieved through having shelter. 

Studies have shown that perennial grass hedges or shrubs can significantly increase lamb survival in these high risk areas, especially for lambs born as twins or triplets. 

The tool is available as a downloadable Excel spreadsheet.

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Inputs

You enter data about your property into the categories provided, for example:  

  • Weather station information:  
    • your state, the location of your nearest weather station, your main month of lambing
  • Paddock and sheep production values: 
    • paddock area, number of ewes, life expectancy of the shelter, time to reach peak shelter effectiveness
  • Economic and financial values: 
    • cost of shelter establishment, extra feed required, extra value of twin lambs, maintenance costs, agistment costs.

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Outputs

The tool determines whether or not an investment in shelter will give you a good return, based on your inputs. Outputs include data and decision criteria related to:

  • Net present value (NPV): the net sum of the discounted values of the future income and costs associated with the shelter. If positive, the tool will recommend you invest in shelter.
  • Annuity ($ per ha): The equivalent constant profit per year over the lifespan of the shelter (if it were an annuity). If positive, the tool will recommend you invest in shelter.
  • Annuity ($ per ewe):  As above, but generated per ewe. If positive, the tool will recommend you invest in shelter.
  • Internal rate of return (IRR): Based on the cost of borrowing (interest rate, if all the money is borrowed), is investment in shelter worthwhile for you? 
  • Peak debt and year of peak debt: Gives $ value for debt and year of peak debt. If you can cover this negative cash flow amount with equity or borrowed funds (plus interest) during this year, you may wish to invest in shelter. 
  • Break-even year: Lists the break-even year. After this year, the shelter offers positive cash flow. Can you cover negative cash flow until this point?

The tool also provides a graph of projected future income for shelter investment over the projected life of the shelter, based on the above criteria. 

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Reliability

The tool is new and currently in a pilot phase. The Department of Environment and Primary Industries (DEPI), Victoria, is keen to receive feedback from users.

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History

The tool is derived from a comprehensive analysis of climate and farm economics. It was designed and developed by researchers for EverGraze – a national research, development and extension project concerned with developing perennial-based farming systems to increase the profitability of livestock enterprises across the high rainfall zone of southern Australia.

EverGraze was originally a Future Farm Industries CRC research and delivery partnership but is now managed by DEPI Victoria, in partnership with Meat and Livestock Australia Limited (MLA) and Australian Wool Innovation (AWI).

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Support available

Contact EverGraze by email: evergraze@wool.com or phone DEPI Victoria on 136 186 from anywhere in Australia.

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Where to get it

The tool is available as a downloadable Excel spreadsheet on the EverGraze website (click on 'See Resource'). 

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Cost

 Free

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