This report examines a study commissioned by the Institute for Future Farming Systems to provide analysis to Meat and Livestock Australia. It brings together the results of several research activities aimed at exploring and uncovering the value that might be derived for cattle and sheep famers if they could remotely monitor the Location, Behaviour and State (LBS) of the animals under their management.
The deployment of sensors on a number of properties provided industry participants with hands-on experience with the information that can be provided by LBS systems. On-line surveys and detailed producer interviews explored the potential applications and benefits that cattle and sheep farmers might gain from the development of commercial LBS systems. The producers interviewed reported a diverse range of potential applications and benefits. There were a small number of applications that had large value but much of the financial benefit would come about through the cumulative impact of a number of applications with smaller revenue gains and cost savings.
The value of non-financial benefits of LBS systems should not be underestimated. Many producers articulated the benefits that would come in terms of “peace of mind” from implementing these systems.
The economic value outside of the on-farm financial benefits reported by producers involved in this study could also be significant. Two areas of particular industry level impact are biosecurity and animal welfare/social license. Further research into how LBS system might impact on these areas is required to confirm the economic benefits likely to flow from improved biosecurity and social license outcomes.
One of the key applications that was consistently reported and had high value for this segment was the use of LBS information to refine mustering activities. This application alone was estimated to save an average 3.84% of costs across the five of the six producers interviewed.
Across all applications, pastoral beef producers articulated average benefits of 6.8% in increased revenue and 3.8% in cost savings. Prevented revenue losses from catastrophic or unusual events (CUE) averaged only 0.2%.
Modelling of the potential benefit of whole of herd/flock deployment as limited by likely adoption rates (and not including the costs of LBS systems) suggest total accumulated benefits of between AUD 280 million and AUD 808 million for the beef industry over a 10 year period. The accumulated benefits for sheep would be in the range of AUD 204 million to AUD 501 million over a 10 year period.
Considering the minimum (realistic) scenario for the beef industry, benefit cost ratios’ (BCR) of 1.1 (at Sensor Cost (SC) AUD 50/year) and 5.3 (SC of AUD 10/year) for whole of herd deployment at a national level were estimated.
Considering the minimum (realistic) scenario for the sheep industry (in the High-rainfall/Sheep- wheat zone) BCR’s of 1.4 (SC of AUD 10/year) for a full flock deployment and 1.2 (SC of AUD 50/year) for sentinel deployments suggest some value. Increased sensor cost scenarios (AUD 50 for whole of flock) and (AUD 150 for sentinel) are clearly not a viable option under the proposed adoption profile.
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