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A multi-stage stochastic optimization model of a pastoral dairy farm

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  • Dowson, Oscar
  • Philpott, Andy
  • Mason, Andrew
  • Downward, Anthony

Abstract

Pastoral dairy farmers make sequential decisions in the face of long-term environmental uncertainty and price volatility. Decisions made early in the season, such as the number of cows to stock per hectare, can have significant effects later in the season if the farmer is forced to import additional feed to meet the cows’ energy demands during a drought. In this paper, we present POWDer: the milk Production Optimizer incorporating Weather Dynamics. POWDer is a novel multi-stage stochastic program that divides the dairy farming season into weeks and links these weeks by a system of linear dynamics. By applying POWDer to a case farm in New Zealand, we demonstrate POWDer’s promise as a tool that can help participants in the New Zealand dairy industry understand and plan for the challenge of farming in a stochastic world.

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  • Dowson, Oscar & Philpott, Andy & Mason, Andrew & Downward, Anthony, 2019. "A multi-stage stochastic optimization model of a pastoral dairy farm," European Journal of Operational Research, Elsevier, vol. 274(3), pages 1077-1089.
    • Handle: RePEc:eee:ejores:v:274:y:2019:i:3:p:1077-1089
    DOI: 10.1016/j.ejor.2018.10.033
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