Economic analysis of improved perennial pasture systems

Claire Lewis, Bill Malcolm, Robert J. Farquharson, Brian Leury, Ralph Behrendt and Steve Clark

AFBM Journal, 2012, vol. 09, issue 2, 19

Abstract: New perennial pasture grazing systems have been developed for livestock production in the high rainfall zone of southern Australia. These systems provide producers in south west Victoria with the opportunity to increase stocking rate per hectare compared to current practice. A partial discounted cash flow budget with a whole farm perspective was used to analyse the economic performance, and risk implications, of a 100 hectare investment in the new perennial pasture systems over time for a representative farm at a range of stocking rates. The effect of seasonal variability was investigated and the impact of establishment failure was examined. Based on the assumptions about pasture performance used in the analysis, the new perennial pasture systems were more profitable than current practice at all stocking rates tested with successful establishment. If establishment was successful, an increase in stocking rate was not required to achieve a positive return on investment as a result of reduced supplementary feeding requirements. Risk and return increased concurrently with increasing stocking rate. Increasing stocking rate up to 30 DSE/ha reduced the time taken for the pasture investment to return to positive net cash flow.

Keywords: Agribusiness; Farm Management; Livestock Production/Industries; Production Economics (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:afbmau:143156

DOI: 10.22004/ag.econ.143156

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