The economic impacts of grassland reseeding in Northern Ireland

Elias Mulugeta and Alastair Greig

No 321180, 96th Annual Conference, April 4-6, 2022, K U Leuven, Belgium from Agricultural Economics Society - AES

Abstract: In this paper, a Cost-Benefit Analysis (CBA) was carried out to investigate the profitability of investment undertaking on grassland reseeding using a simulation of different scenarios on reseeding rates. We employed the Net Present Value (NPV) and the Annualised Net Present Value (ANPV) evaluation criterion to determine the possible returns from grassland reseeding on a dairy farm. Furthermore, the assumptions made in the CBA are improved using econometric analysis. Both fixed and random effects regression models were applied to improve the assumptions. The results show that the effects of increasing reseeding rates will increase profit on a dairy farm. In grassland production, the profit is a result of increasing silage yield. Dairy profit is mainly a result of substitution between concentrate feed and silage. The correlation between silage yield and the reseeding rate is also positive. A 1% increase in reseeding rate could increase silage yield by 225kg. The correlation between milk yield and the reseeding rate is also positive. A 1% increase in reseeding rate could increase milk yield by 55.8 litres. This study also estimated the least-cost substitution between concentrates and silage feed occurs when the MRS is at 20.5%.

Keywords: Crop Production/Industries; Farm Management; Livestock Production/Industries (search for similar items in EconPapers)
Pages: 28
Date: 2022-04
New Economics Papers: this item is included in nep-agr and nep-dem
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aesc22:321180

DOI: 10.22004/ag.econ.321180

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