No credits yet, but carbon-friendly regime pays at Bingara

Then he realised he was probably already on the carbon-building bandwagon, anyway.

The grazing management regime on the McMurtrie family's northern NSW Angus-Wagyu beef enterprise south of Bingara had been moving towards smaller paddock sizes and faster stock grazing rotations for more than a decade.

Carrying capacity had subsequently increased as pasture utilisation improved, particularly on ridges and hilly country.

Grazing pressure spread out, too, no longer concentrated on the traditional "sweet spot" arable soils.

Pasture recovery rates were also generally better, suggesting the soil's moisture holding capability was improving, quite possibly thanks to increasing soil carbon content.

"Our current grazing management style and the way we've been heading has probably already lifted our carbon levels," he said.

"Now might be a good time to get serious about the rewards available for carbon capture - and not just from getting carbon credits."

Mr McMurtrie and his wife, Anna, realised their on-farm management strategy also aligned with others who were successfully sequestering soil carbon.

Those operators were lifting farm productivity by rotational grazing, running big livestock mobs, planting grazing crops and strategically adopting regenerative pasture management practices, but additionally, they were entitled to accumulate valuable Australian Carbon Credit Units.

The McMurtries, on Yarrandabbie, also noted pressure building in Europe and New Zealand requiring agriculture to account for its own emissions and contribute to global carbon neutrality and greenhouse emission sequestration goals.

They felt they had to be ready for any carbon neutral demands from the beef market supply chain and be ahead of the game before future regulations might be forced on them.

"We were very sceptical for a long time," Mr McMurtrie said.

"It seemed a lot of opportunists were jumping on the carbon bandwagon to make a quick buck from agriculture."

"But it now feels like a tsunami of carbon management expectations really is coming towards us."

After weighing up their options, including undertaking a cost-benefit analysis for their business plan with carbon project developer, Atlas Carbon, the McMurtries have now submitted carbon project paperwork to the Clean Energy Regulator.

Soil sampling in coming months will establish baseline carbon levels for the project's participating holdings.

Their MC Ag enterprise encompasses five properties totalling about 5800 hectares and running 1800 breeders, plus trade cattle.

However, some country will be excluded from the 25-year carbon project because the terrain and soil type are too difficult to work with and expect carbon gains.

The project would target carbon sequestration increases of about 0.5 tonnes/ha annually, supported by the McMurtries' continued long-time use of RCS grazing strategies and MaiaGrazing management and record keeping software.

They have also begun implementing fresh management strategies to align with more ambitions beef production goals and the CER's carbon credit building requirements.

A lot more fencing and stock water investments are on the drawing board as, perhaps, 30 per cent more paddocks could eventually be created in 25ha to 50ha subdivisions.

Guided by their project developer and regular carbon monitoring, extra attention will be devoted to soil mineral imbalances, a transition to more permanent pasture species, including tropical grasses, and direct drilled grazing crops.

Mr McMurtie said the extra spending required to improve MC Ag's grazing strategies and herd productivity had been on the cards long before he opted to sign up to an official carbon sequestration project.

However, now his business had an expert, long term professional partner working with him, the extra productivity should cover the costs and he could expect to store up carbon credits as additional reward for that effort and expenditure.

He had no plans to sell any credits issued.

"Return on investment will be based around productivity gains from our cattle and market access opportunities, or price premiums that may otherwise not be available if we didn't have a carbon project," he said.

Improving the productivity and capital value of the McMurtries' land would also enhance their equity and borrowing capacity to support further improvements and expansion.

Atlas Carbon's business development and partnerships head, Colin Feilen, said despite the big investment required in the first five years, his company aimed for carbon projects to deliver break-even returns by year four or five, depending on the wire and water infrastructure, or soil biology and pasture conditions already existing.

"Producers who will do well with soil carbon projects are already focused on lifting productivity by being open to management change," he said.

"And they'll need to make thousands more very well considered management decisions over the next 25 years.

"Soil carbon sequestration credits are basically an incentive in the marketplace to support what you are already thinking about or doing to achieve those production gains."

Importantly, success also required soils with the physical characteristics to support sequestration and soil carbon retention, plus sufficient rainfall.

A certain degree of enterprise scale was needed to maintain expenditure on productivity initiatives during market and seasonal highs and lows.

Atlas' cost-benefit estimates were only made after the company was confident those primary criteria could be met.

The analysis was not financial advice, but rather a conservative overview of carbon and production estimates based on existing market information and land and livestock productivity expectations after "blowing open all the costs associated with a successful project, including commission".