Executive Summary

Background
The RIRDC study (MUA-1A) found that, for a hypothetical grazing property in the rangelands of NSW, harvesting kangaroos for human consumption could cover both the capital and variable costs of the enterprise. It also drew attention to the potential economic and environmental benefits of a reduced stocking rate of domestic stock, if accompanied by measures to control total grazing pressure.

A RIRDC workshop in May 2004 on the Sustainable Wildlife Enterprises Program concluded there was a need for more economic analysis and business case development for the industry proposals that emerged from that workshop. This project was proposed to progress that work.

Objectives
The objectives of this project were to:

• Consider techniques and procedures for innovative production and processes for harvesting kangaroos that emulate the conventional livestock industries, such as harvesting yearlings, biased sex ratios, and product tracing along the value chain.
• Refine the previous model of wildlife utilisation strategies for a grazing property in the arid rangelands and incorporate stochastic analysis of farm level economic effects of more conservative stocking rates, including a period covering a full range of seasonal and commodity price conditions.

Methodology
The project consisted of two main tasks:

1. Construction of a multi-year model of a conventional wool enterprise based on a self-replacing ewe flock, incorporating a typical pattern of climatic variability, to illustrate the potential impact of this variability on financial performance of the enterprise.
2. Further development of the rangelands kangaroo enterprise presented in MUA-1 to illustrate the possible effects of potential innovations in management of the kangaroo resource on a small group of cooperating properties.

Results
The ewe breeding enterprise model usefully illustrated the drastic financial effects of rainfall deficiency (drought) in two years out of ten, by demonstrating that accumulated surpluses would be consumed by the costs of supplementary feeding and by the inability to join ewes in those years.

The model of the kangaroo harvesting enterprise was developed for a group of neighbouring properties. This allowed significant economies of size to be achieved. On the Base Case assumptions, the returns from the kangaroo enterprise are sufficient to just cover the fixed costs within the operational life of the capital equipment. The assumptions used in the Base Case were mostly more conservative than those presented in the earlier research, except for the price per kilogram received for kangaroo meat at the chiller. Sensitivity testing was carried out on several of the key physical and financial variables.

Implications
Based on the results, using simplified assumptions and hypothetical data, the models show good potential for further development. The results of the sheep model are consistent with widespread experience of the actual effects of droughts on sheep enterprises in the rangelands. It therefore provides a promising tool for illustrating the potential effects of drought. Suggestions for several further useful refinements to the data and assumptions of both models are made. The models now need to be developed further using data and decision rules based on the participating properties from the trial sites.
 

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