The property, ‘Kalbilli’, is an 820 ha grazing property near Bungendore, carrying 70% sheep and 30% cattle. To date 25% of the property has been limed. We have mainly light grey, spewy granite soils. Pastures are clover dominant with some native grasses, predominantly rats tail fescue. Most paddocks have a super history of about 0.75 t/acre (1.85 t/ha).

In 1980, it became necessary to improve the carrying capacity of the property because of economic pressures. Subsequent soil testing showed our soils to have a pH of 4.2-4.3 and Al levels between 18 and 25%.

After consultation with the District Agronomist, Mike Keys, we decided to apply lime at 1 t/acre (2.5 t/ha) to effectively raise the pH to around 5.2 or 5.3 and lower the Al levels to around 2-3%. We thought that would also increase the carrying capacity by about 3.7 DSE/ha.

We decided to apply the lime and put the paddock down to oats for a year prior to sowing the new pasture. We thought this practice would allow the lime time to begin its neutralising effects and therefore have ideal conditions for the new pasture seeds.

The procedure was:

1980 - soil test : pH 4.2; Al levels 18-25%
- set objectives
1981 - 2.5 t lime/ha; oat crop sow.n
1982 - pasture sown with acid-tolerant species
1983 - soil test : pH 5.1; Al levels 2-3%
1986 - soil test : pH 4.8-4.9; Al levels 2-3%

The new pastures got off to a shaky start because of the severe drought conditions we were all experiencing in 1982, but with plenty of TLC, the pastures established surprisingly well. Single super was applied at the rate 1 cwt/acre (125 kg/ha) in 1983 and 1985.

Soil tests in 1983 showed the pH to be 5.1 and Al levels to be 2-3%. The pastures were looking very healthy and the grass species well established.

Soil tests in 1986 showed the pH to be 4.8-4.9, a decrease of about 0.3 pH unit in 3 years while Al levels had remained around 2-3%.

Mike Keys has made me aware that the decrease in pH could be entirely due to the variation in the time of year, temperature and moisture content of soil at the time of testing. If this theory proves to be incorrect and we do have a depreciation effect of 0.1 pH unit per year, then in 10 years the pH would be back down to around 4.2. To date, the Al levels do not appear to have risen.

We have also noticed a reinfestation of rats tail fescue into the paddocks. It reappeared in 1984 (possibly because we were unable to super that year) and has gradually increased in density.

So that is concern No. 1 - how long will the lime last?

Concern No. 2 is the cost of liming and pasture establishment in relation to the improvement in production.

We keep very detailed paddock books to enable us to keep a close check on how well each paddock is doing, when compared to others in stocking rates, suitability of livestock, including lambing percentages and deaths, etc. From these records, we have been able to establish what improvement in carrying capacity and production there has been on the limed and pasture improved paddocks compared to the unlimed but supered country.

Firstly, the cost of liming and pasture improvement in 1981/82 was $167/ha and in 1986 is estimated to be $252/ha (Table 7.1).

TABLE 7.1 The cost of liming and pasture improvement in 1982 and 1986

Costs/ha	1982	1986
Pasture seed Super and bagged lime at sowing Bulk lime spread Cult and sowing	$25 $19 $88 $35	$25 $27 $155 $45
TOTAL:	$167	$252

For the past three years we have been comparing two, 40 ha paddocks side by side, one limed and pasture improved, the other not limed with a sub-clover-dominant pasture. Both paddocks have had the same applications of super during the period.

The results (averaged) are as follows:

Limed country - 8.69 OSE/ha (3.52 DSE/acre)

Unlimed country - 6.7 OSE/ha (2.7 DSE/acre)

An improvement of 2 OSE/ha (0.82 DSE/acre) in carrying capacity, was achieved - about 55% of what we had hoped. In addition we have an improvement in wool cut of 0.5 kg/sheep because of better quality pastures for a longer period during the year.

With these figures available, we then did margin over direct costs (MODC) to establish the improvement in production (Table 7.2).

TABLE 7.2 A comparison of the margin over direct costs between the objective and achieved production from Merino wethers.

(a) Margin over direct costs - achieved

PARAMETERS	LIMED	UNLIMED
Culling % Mortality % Replacement rate % Replacements (bred/bought) CFA price $ net Replacements $ landed Wool/unit (inc. crt) kg Average price $/kg net DSE conversion Property carrying (DSE/ha)	25.00 2.00 27.00 bought $14.00 $20.00 6.50 $3.30 1.00 8.69	25.00 2.00 27.00 bought $14.00 $20.00 6.50 $3.30 1.00 6.70
Output Sales CFA Sales wool net Less: (replacements)	$3.22 $21.02 $-5.40	$3.22 $19.40 $-5.40
TOTAL:	$18.84	$17.22
Direct Costs Animal health Shearing and crutching Direct items - stock insurance - PP rates	$.60 $2.45 $.07 $.09	$.60 $2.45 $.07 $.09
TOTAL DIRECT COSTS:	$3.21	$3.21
Margin over Total Costs -/unit Margin over Total -/DSE Margin over Total -/ha per annum	$15.63 $15.63 $135.83	$14.01 $14.01 $93.89

Gain = $42.00/ha per annum

(b) Margin over direct costs - objective

Culling % Mortality % Replacement rate % Replacements (bred/bought) CFA price $ net Replacements $ landed Wool/unit.(inc. crt) kg Average price $/kg net DSE conversion Property carrying (DSE/ha)	25.00 2.00 27.00 bought $14.00 $20.00 6.50 $3.30 1.00 10.40	25.00 2.00 27.00 bought $14.00 $20.00 6.00 $3.30 1.00 6.70
Output Sales CFA Sales wool net Less. (replacements)	$3.22 $21.02 $-5.40	$3.22 $19.40 $-5.40
TOTAL:	$18.84	$17.22
Direct costs Animal health Shearing and crutching Direct items - stock insurance - PP rates	$.60 $2.45 $.07 $.09	$.60 $2.45 $.07 $.09
TOTAL DIRECT COSTS:	$3.21	$3.21
Margin over total costs -/unit Margin over total -/DSE	$15.63 $15.63 CC	$14.01 $14.01 On

Gain = $69.00/ha per annum

An analysis of the results follows:

	Limed	Unlimed	2 DSE/Ha Improvement
MODC - per DSE	$15.63	$14.01	$1.62
- per ha	$135.83	$93.89	$41.94

If we had achieved our objective of 1.5 DSE/acre improvement then:

Limed	Unlimed	Improvement
MODC - per ha $162.56	$93.89	$69.67

Simple calculation is used to see if the whole exercise was worthwhile on the basis that the useful period of the lime is 15 years.

- increase in production of $42/ha/annum

- 1982 cost of improvement was $167/ha

** If the funds were borrowed - $167 x say 14% = $23.40/annum (interest only) Therefore gain of $42.00 less $23.40 = $18.60 net gain/ha/annum.

** If funds were available, the opportunity cost of the money would be, say, 7% - $167 x 7% = $11.70/ha/annum.

Therefore, gain of $42.00 less $11.70 = $30.30 net gain/ha/annum.

Thus, on the 1982 costs, liming was worthwhile.

The situation varies slightly if the calculations are taken on today’s costs of liming and pasture improvement - using the same simple calculations but with cost of improvement = $250/ha, then

** If funds are borrowed at, say, 17% - $250 x 17% = $42.50/ha/annum less improved returns of $42/ha/annum = no monetary gain/ha/annum.

** If the funds were on hand, then the opportunity cost of the money would be, say, 9% (after tax).

$250 x 9% = $22.50/ha

less improved returns $42.00/ha/annum

= net gain of $19.50/ha/annum.

There are many other ways of doing the calculations, taking into account depreciation/amortisation, internal rate of return, etc, but as I am not an accountant I will not attempt to go into them.

There are two other factors that should also be remembered:

1. by increasing the carrying capacity, the property would be worth more on a dry sheep area basis if sold;

2. is the carrying capacity of the unlimed country gradually going to fall, therefore reducing the productivity of those pastures?

In conclusion, I must say that I believe liming and establishing grasses on acid soils is worthwhile but these two points should be considered:

1. define your objectives clearly;

2. carefully work out the costs of improvement in relation to the expected increased returns from the dollars to be outlaid.