When fixed costs are added to a land use rotation, a whole-farm margin comparison can be analysed.
Table 1 and Table 2 provide comparisons of two typical rotations in the medium-rainfall zone.
The tables illustrate that a less intensive rotation can be as profitable and carry less financial risk.
Profit for each crop type varies according to their position in the rotation.
For example, wheat on fallow has higher yield potential due to stored soil moisture.
However, this fallow-sheep-sheep rotation has a lower cost. This is due to the lower weed pressure being offset by extra nitrogen fertiliser requirements to support the higher yield.
The same six-year average profit is achieved for each of the above rotations.
However, the lower crop intensive rotation spends an average $69 per hectare less.
When using the lower intensity rotation, a 3000-hectare farm would spend about $200,000 less per year.
Yet a lower intensity rotation can still achieve the same profit with less financial risk. The lower total annual dollar spend, combined with less income volatility between seasons, results in a more resilient farming system. This is one that is making profits in more years.