Merging Small Scattered Pastures into Large Pasture-Forest Mosaics Can Improve Profitability in Swedish Suckler-Based Beef Production

Kristina Holmström, Anna Hessle, Hans Andersson and Karl-Ivar Kumm
Additional contact information
Kristina Holmström: Department of Animal Environment and Health, Swedish University of Agricultural Sciences, PO Box 234, 53223 Skara, Sweden
Anna Hessle: Department of Animal Environment and Health, Swedish University of Agricultural Sciences, PO Box 234, 53223 Skara, Sweden
Hans Andersson: Department of Economics, Swedish University of Agricultural Sciences, PO Box 7013, 75007 Uppsala, Sweden
Karl-Ivar Kumm: Department of Animal Environment and Health, Swedish University of Agricultural Sciences, PO Box 234, 53223 Skara, Sweden

Land, 2018, vol. 7, issue 2, 1-14

Abstract: A scattered structure of small pastures has negative effects on profitability in beef enterprises because small enclosures result in high labor costs per livestock unit. Moreover, larger enterprises distribute the costs across more livestock units and hence achieve lower operating costs. Creating larger coherent pastures makes it easier to increase herd size and yields positive effects due to economies of scale. This study on five Swedish organic cow-calf enterprises examined how profitability is affected by creating larger pastures from small scattered pastures and adjacent forest land. Additional income, additional costs, reduced income and reduced costs were taken into account using a partial budgeting technique. A change to larger coherent pastures was found to be profitable for all enterprises examined. Agri-environmental payments and supports were the most important benefit from creating larger pastures, followed by income increases and cost reductions resulting from economies of scale and improved consolidation. Income reductions due to premature final felling (clearcutting of forest land) and the opportunity cost of forest land did not have a major influence. To conclude, creating large coherent pasture-forest mosaics by merging small scattered enclosures is profitable for Swedish organic cow-calf enterprises.

Keywords: pasture; semi-natural grassland; pasture-forest mosaic; cow-calf; beef; cattle; cow; economic; profitability; consolidation (search for similar items in EconPapers)
JEL-codes: Q15 Q2 Q24 Q28 Q5 R14 R52 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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