SIBI new on-farm technology economic case study: remote cameras
Case study: Chris and Robyn Patmore of Riverbend stud
Owners: Robyn and Chris Patmore
Property location:five farms in the Three Springs, Irwin, Morawa and Perenjori shires
Property size: 10000 hectares
Stock: 100 per cent sheep - 4000 Merino ewe flock and Border Leicester and Poll Dorset studs
The eastern country is leased out for winter cropping so the sheep graze the stubbles during summer.
Lambing: 100-115 per cent
Technology: Remote monitoring cameras
Average annual rainfall: 290 millimetres (mm)-450mm
In the northern wheatbelt of Western Australia (WA), the soil types are unsuitable for dams, making troughs the only solution for stock water. In summer the troughs need to be checked every few days in case there is a problem with the water. Historically this has involved a water run to physically inspect each trough.
Chris and Robyn Patmore farm in the northern wheatbelt. Robyn works off farm while Chris is responsible for the daily operations. The original farm, located north of Eneabba in the Three Springs shire, has grown with purchases in the shires of Irwin, Perenjori and Morawa to now be 10000 hectares (ha) across five separate locations. The farm is spread out with the Morawa farm 130 kilometres from the home farm.
Chris runs a 100% sheep operation leasing the Perenjori and Morawa properties for winter cropping. The farm runs both Poll Dorset and Border Leicester sheep studs as well as a commercial merino flock with 4000 ewes lambing at 100–115%. The Three Springs and Irwin properties are better for lambing while the Perenjori and Morawa farms fatten lambs better over summer.
Chris’s dilemma
The purchase of properties located over 100 kilometres from the original farm created a dilemma. Every three days in summer Chris needs to get around the properties to do bore runs costing over $33000 per year. Chris had to do a water run covering 3-400 kilometres and taking around seven hours to complete. Each bore run cost Chris $565, consisting $320 worth of labour and $245 in vehicle costs.
Chris is the only regular worker on the farm and getting casual workers is difficult, so from November to May Chris does bore runs costing over $33000 each year. “It’s ok if you find you need to do something but doing the full run for no purpose is a waste of time”. The time involved meant other things were being missed on farm and also Chris could never get away from the farm over summer for more than two days at a time.
Remote cameras
Chris had originally considered water level monitors but rejected the idea as he couldn’t tell if the trough was dirty and the sheep weren’t drinking.
The solution Chris chose was to use remote cameras. A remote camera can be set up on each trough to take a photo at desired intervals. The camera is set up on a star picket for easy transfer and has a sim card for wireless phone connection.
Once the photo is taken it’s updated to a phone app allowing instant viewing anywhere with phone reception. If an individual camera requires more attention, the app can either scroll back through previous photos or take another shot as required. Chris has set his cameras up to not only view the trough but also view either the tank with gauge or approaching sheep, further enhancing the value of the camera.
Being a mature technology, the cameras are plug and play, only requiring phone reception and they come straight up on the app. On his farms Chris has good phone coverage and so hasn’t had to develop either a local area network or boost the coverage. The cameras will easily operate with minimal phone coverage because each comes with its own aerial. Setting up is easy, just place it on a star picket and turn the card on.
Comparing remote cameras against manual monitoring
The Perenjori and Morawa properties are run with 15 separate mobs over summer, each requiring its own camera. The camera costs $1500 to purchase with annual monitoring costs of $240 to $270 depending on the vendor and every two years or so the battery requires replacing costing around $30. During winter the cameras are packed away at home, reducing the running costs by half. Chris has been running with the current system for five years and sees no reason why it wouldn’t last another ten.
With 15 cameras required, setup costs were $22500 and ongoing maintenance is $2250 per year. Setting the cameras up takes no extra time as he is doing it when moving the mobs anyway.
By adopting the remote cameras, Chris has been able to reduce his water runs from 60 per year to around 18, a saving of 42 runs.
Each run takes seven hours, wages costs have been calculated at a wage of $87000 plus on costs for a farm manager working out to $46/hour. With Chris being the farm owner, it could be argued that these costs should be higher as he makes the higher value management decisions on the farm.
The water run takes around 350 kilometres and the cost per kilometre has been set at $0.70/kilometre based on the RAC estimate of operating a diesel Landcruiser in 2015, including depreciation and interest costs.
Over a ten year period, the system cost $22500 and saves Chris $21400 per year. The net present value (NPV) for the investment with a discount rate of 6% over ten years is $142000. The NPV calculation includes a time value of money component, so if the result is greater than $0, then the investment is worth making. The benefit cost ratio (BCR) of the proposal is 5.3, so for every dollar invested in remote cameras, Chris is saving $5.30. The payback period for the investment is two years.
Every farm has a different cost of capital and while 6% has been taken as the cost of capital, the effect on changing the risk rate can be seen in the table below where each increase in the risk rate reduces the return by around $9000 (Table 1).
Table 1The return on remote cameras at different risk rates. Note acronyms: net present value (NPV), benefit-cost ratio (BCR).
Risk rate % / 5% / 6% / 7% / 8% / 9%NPV $ / $151 000 / $142 000 / $133 000 / $124 000 / $117 000
BCR / 5.7 / 5.3 / 4.9 / 4.5 / 4.2
Years to payback / 2 / 2 / 2 / 2 / 2
Farms located further south in other regions may monitor for shorter time frames and table 2 shows the impact of reduced monitoring on the return. With such a large distance travelled to do a bore run, the system on Chris’s farm would still be profitable even if only run over three months.
Table 2The effect of changing monitoring frequency on return
Monitoring (months) / 3 / 4 / 5 / 6 / 12Runs saved / 21 / 28 / 36 / 42 / 85
NPV $ / $52 000 / $82 000 / $116 000 / $142 000 / $324 000
BCR / 1.3 / 2.6 / 4.2 / 5.3 / 13.4
Years to payback / 3 / 2 / 2 / 2 / 1
Part of the value to Chris is the ability to get away from the farm over summer, where previously he couldn’t. The wellbeing benefits, while real, haven’t been factored into this calculation.
Having adopted this technology, Chris is just as busy as before. As he explains, “I’m still working the same and the car is doing as many K’s as before. I’m just being more productive in other areas of the farm now.”
Value of remote cameras
To determine the value of a single remote camera, the costs and benefits have been modelled based on Chris’s farm. Assuming the ute travels around 50 kilometres per hour while monitoring, the key variable is the distance travelled.
Over a ten year period, the breakeven distance to monitor is five kilometres travelled as can be seen in the table below. With 42 fewer water runs each year, there are significant savings on the investment. At 10 kilometres (km) travelled, the investment returns $1.8 for every dollar invested (Table 3).
Table 3The effect of changing the distance travelled on return
Distance travelled / 5km / 10km / 15km / 20km / 25kmNPV $ / $0 / $2600 / $5200 / $7700 / $10300
BCR / 1.0 / 1.8 / 3.5 / 5.2 / 6.9
Years to payback / 1 / 3 / 2 / 2 / 1
An alternative way to look at the value of the investment is to compare the distance travelled against the number of water runs saved. Table 4 below shows the benefit cost ratio for different run lengths and number of watering saved.
Table 4The benefit–cost ratio for the distance travelled against the number of water runs saved
Waterrunssaved/year / Distance saved per tank10km / Distance saved per tank
15km / Distance saved per tank
20km
20 / 1.0 / 1.8 / 2.6
30 / 1.8 / 3.0 / 4.2
40 / 2.6 / 4.2 / 5.8