Victorian beef and lamb producer Andrew Freshwater provides some thoughts and numbers based on a modelled farm in Northeastern Victoria, where a ‘do nothing’ fertiliser and soil improvement strategy cost the business $3.13m over a few years  …  

Inflation

The most significant mistake a producer can make in 2026 is to use 2022 prices as a mental benchmark. Between January 2022 and today, the Producer Price Index (PPI) for agriculture has outpaced general inflation.

• The Adjustment: Cumulative inflation has reached roughly 21.4%.
• Purchasing Power: $1.00 in 2022 now buys roughly $0.79 of equivalent goods.
• The Inaction Fallacy: Our modelled farm looked at saving $54,000 a year by skipping fertiliser. In reality, the 2026 cost of the same fertiliser has risen, and the value of the cash they “saved” has eroded.

The Victorian Farm Monitor Project (VFMP) overheads

Data from the Livestock Farm Monitor Project (LFMP) for Northern Victoria shows that while producers tried to cut variable costs, their Fixed Overheads became an inescapable drag on cash.

• 2022 Fixed Overheads: roughly $76.50/ha
• 2026 Fixed Overheads: roughly $118.00/ha (+54.2%)
• The Mechanics: Rates, insurance, power, and compliance are “production-blind.”

On our 714ha farm model, the cost of just existing rose from $54,621 to $84,252.

By doing nothing and allowing stocking rates to drop, the overhead cost per animal doubled.

The farm didn’t save money; it simply made every remaining cow more expensive to run with less productivity.

The regen ag viewpoint

The nutrient export reality

The Regenerative Agriculture argument often claims that biology and animal impact can replace mineral inputs, this isn’t right when reconciled with the Law of Conservation of Mass.

Every 450kg steer that leaves the modelled farm in North East Victoria is a physical export of minerals:

• Phosphorus (P): 3.2kg
• Nitrogen (N): 11kg
• Calcium (Ca): 6.5kg

For a 10,000 DSE enterprise, the annual export is roughly 10,000kg of elemental Phosphorus.

The manure fallacy

To replace that 10,000kg of P using only manure (which is roughly 0.6pc Phosphorus):

• You would need to spread 2,333kg of dry manure per hectare.
• To generate this much manure, you would need to run 21 DSE/ha all year round.
• The Paradox: To run 21 DSE/ha, the farm needs to grow 11,500kg DM/ha. But an unfertilised North East Victorian farm only produces 4,500kg DM/ha.

The logic just doesn’t add up You can’t run enough cattle at the stocking rate required to grow the grass unless you already have the fertility to grow the grass. Doing Nothing isn’t regenerative; it’s extractive!

Aluminium levels in soil

pH Acidification (0-10cm vs 10-20cm)

In the granitic soils around this region, soil acidifies at a rate of ~0.05 pH units/year under grazing.

• The Threshold: When pH (CaCl2) drops below 4.8, Aluminium (Al) becomes soluble.
• The Toxicity: Soluble Al is a root-tip poison. It stops cell division.

The club root effect

In the Do Nothing model, by 2026, the soil pH has dropped from 5.1 to 4.9. The Aluminium percentage on the exchange complex has spiked to >15pc.

• The Result: Phalaris roots, which should be 1.2 metres deep, are now “clubbed” at the 10cm mark.
• The February Consequence: In a week of 38°C days, a plant with a 10cm root system dies. A plant with a 1-metre root system continues to access the sub-soil moisture we saw in the SOI data.

Poor animal growth rates

Average daily gain (ADG) collapse

The most expensive part of “Doing Nothing” is the shift in botanical composition. As Phosphorus (P) drops, Clover (the high-protein driver) disappears.

• The Weeds: Silver Grass and Capeweed take over and animal growth plummets.
• The Energy Gap: In 2022, the steers that were gaining 1.2kg/day on a Clover/Phalaris mix are by2026, on a Silver Grass/Onion Grass mix, they are gaining 0.4kg/day in spring and losing weight in winter.

This Maintenance Feed Only state means the model farm is paying $84,252 in overheads to run animals that aren’t actually growing. It’s now essentially a low productivity farm that doesn’t grow much grass, doesn’t put much weight on cattle and has sub optimal cow fertility rates – that’s just simply not sustainable in anyone’s language.

Where’s the money gone?

Our modelled farm has gone down the path of saving money for a few years but this has in fact lead to a total destruction of value.

The Revenue Gap ($2,114,819)

This is the Opportunity Cost. If the farm had stayed at 14 DSE with an industry competitive Average Daily Gain, it would have produced 1.5 million kilograms more beef than the Do Nothing farm over the four year period. Adjusted for 2026 dollars, this is the hard cash that never hit the bank.

The Asset Restoration Bill ($523,005)

To fix the damage of four years of mining the soil, the Do Nothing farm now has to pay a Capital Reset:

• Capital Lime: $196,350 (To lift pH back to 5.2)
• Capital P: $98,175 (To lift Olsen P from 8 to 15)
• Pasture Re-sowing: $199,920 (To replace the dead Phalaris)

Labour Opportunity Cost ($500,000)

A farm manager’s time is worth $100,000 per year. Over five years, the “Do Nothing” owner essentially donated $500,000 of their life to a project that resulted in a negative return on equity.

How soil-types differ

In North East Victoria, “doing nothing” does not result in a uniform decline. The speed of biological decline is dictated by the parent material of the soil. On our 714-hectare model farm we are likely managing a cocktail of three distinct soil types.

The granitic uplands (The fast burn)

These are the light, sandy loams. They are chemically fragile.

• The Mechanic: They have low Cation Exchange Capacity (CEC), meaning they can’t hold onto nutrients. When you stop applying Phosphorus, the “bank” is empty within 18 months.
• The Acid Trap: Granitic soils acidify faster than any other type in the region. By Year 3 of doing nothing, the Aluminium levels in these paddocks will have hit the 15–20% toxicity threshold.
• The Vegetation Shift: You will see a rapid transition to Silver Grass (Vulpia) and flatweeds

The sedimentary slopes (The hidden erosion)

These are the buckshot gravelly soils. They are tougher than the granite but possess a high P-Buffering Index (PBI).

• The Mechanic: These soils tie up Phosphorus. When you stop applying maintenance Super, the soil biology tries to pull Phosphorus from the locked pool, of nutrients, but in an acidic environment, this process stalls.
• The Vegetation Shift: These paddocks often stay green longer, giving a false sense of security, but the green is Onion Grass and Flatweed – species with zero nutritional value for growing cattle

The alluvial flats (The buffer zone)

These are the heavier, productive soils near the creek lines.

• The Mechanic: They have higher clay content and can mask the Do Nothing strategy for 4–5 years.
• The Trap: Because these are your most productive hectares, the Opportunity Cost of them running at 60% capacity is actually higher than the loss on the hills.

The 10-year financial forecast (2022–2032)

To understand the 2026 cliff, we must project the inaction path into the next decade. Using Victorian Farm Monitor Project historical trends and 2026 inflationary modelling, its best expressed with a comparative cash-flow analysis.

The maintenance model (14 DSE/ha)

• Total Revenue (Real): Stays stable as Average Daily Gain is maintained.
• Input Costs: Rise with inflation, but are offset by the high volume of kilograms produced.
• Net Present Value (NPV): After 10 years, the business has generated $4.8M in net profit (adjusted for inflation).

The do nothing model (The decay)

• Year 1-2: Looks profitable. Cash is saved.
• Year 3-5: Production drops 40%. Fixed overheads (Rates/Insurance) now consume 65% of gross revenue.
• Year 6: The Restoration Bill falls due. To stay viable, the producer must borrow $523,000 at 2026 interest rates.
• Net Present Value (NPV): After 10 years, the business has accumulated $1.2million in losses.

Note: The savings from 2022 are completely obliterated by the Capital Reset required in 2027. Its not actually saving $200k; but delaying a $500k bill while losing $2 million in farm revenue.

Livestock health & genetic erosion

We often focus on the soil, but the 10,000 DSE of livestock are the engine room of turning grass into protein and cashflow! In a Do Nothing system, the model farm isn’t just losing weight; it’s also destroying the genetic capacity of the livestock.

The heifer development crisis

To maintain a 10,000 DSE herd, you need a 20% replacement rate. Heifers raised on Phosphorus-deficient, acidic country fail to hit critical mating weight.

• The Impact: Conception rates drop from 92% to 74%.
• The Financial Hit: You are forced to buy-in expensive replacement breeders from the market, further exposing exposing the business to unknown bloodlines, and unknown genetic capabilities.

The trace mineral black hole

As pH drops, the availability of Molybdenum and Selenium changes.

• The Result: Increase in ill-thrift, lower immune response to worms, and higher mortality rates during mid winter or summer.
• The Cost: Veterinary bills and supplementary lick costs spike by 300% as you try to buy back the health you lost by skipping the fertiliser.

How do I get back on track?

If you find yourself in 2026 with a mined farm, how do you spend that $523,005 restoration bill to get the biggest bang for your dollar?

Just throwing Superphosphate at the problem isn’t the best answer in reality.

Step 1: The lime bridge (Months 1–6)

Before a single tonne of Phosphorus hits the ground, you must neutralise the Aluminium toxicity.

• Action: Apply 2.5t/ha of high-neutralising value Lime – Galong lime is the best for this area.
• Goal: Lift pH from 4.8 to 5.2 to unlock the root zone.

Step 2: The phosphorus-reset (Months 6–12)

Once the Aluminium has started to be neutralised, you apply a Capital Application of Phosphorus.

• Action: 250kg/ha of Single Super.
• Goal: Jump-start the Clover nodulation.

Step 3: The genetics over-sow (Year 2)

The old Phalaris is probably dead and was probably not the best variety for productivity. Its perfect timing to be direct drilling a variety like Holdfast GT Phalaris in as a good base plant for pastures

Between 2022 and 2026, the 10,000 DSE model farm in North East Victoria faced a choice: Invest in business sustainability or invest in flawed cost savings.

The choice to save money by doing nothing didn’t actually save a cent. The model farm took a biological loan from their land at an interest rate that exceeds any bank. When you factor in:

1. Inflation eroding cash (21% loss in power).
2. Overheads rising (54% increase in fixed costs).
3. Revenue collapsing (red meat production lost).

The Do Nothing strategy has cost this enterprise $3,137,824.

As we look at the SOI charts for the remainder of 2026, the message is clear. High-fertility, deep-rooted systems will survive the El Niño. The mined farms will be forced into a total destock by April.