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PR - Profitability And Risk Evaluation Of Novel Perennial Pasture Systems For Livestock Producers In The High Rainfall Zone: Initial Analysis And Results (p273-286)

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  • Lewis, C.
  • Malcolm, B.
  • Farquharson, B.
  • Leury, B.
  • Behrendt, R.
  • Clark, S.

Abstract

Increased awareness by farmers, scientists and farm advisors of the potential to increase the role of perennial pastures in livestock grazing systems has lead to the development and evaluation of new perennial pasture systems for livestock production in the high rainfall zone of south west Victoria. Increased stock carrying capacity per hectare compared to current common practice has been reported. Thorough and convincing whole farm management analysis of the merit of investing in these new perennial pasture systems is required. This evaluation must account for the likely increases in carrying capacity, expected return on extra capital invested, finance implications, effects on the farm balance sheet and other whole farm implications of the change over time including risk. In this work changes to a current-practice, regional representative farm were modelled over time. The approach was to use partial development budgets with a whole of farm perspective to calculate the possible net present values, internal rate of returns and nominal net cash flows of two perennial pasture investment options under a range of stocking rate conditions. Price breakeven and variability of extra net cash flows analysis was investigated, as was risk associated establishment failure. Considering economic returns, risk and finances, investing in these new perennial pasture systems can be an attractive option for farmers in the study region compared the performance of their farm systems under current common practice and also compared to alternative investments off the farm.

Suggested Citation

  • Lewis, C. & Malcolm, B. & Farquharson, B. & Leury, B. & Behrendt, R. & Clark, S., 2011. "PR - Profitability And Risk Evaluation Of Novel Perennial Pasture Systems For Livestock Producers In The High Rainfall Zone: Initial Analysis And Results (p273-286)," 18th Congress, Methven, New Zealand, 2011 345578, International Farm Management Association.
    • Handle: RePEc:ags:ifma11:345578
    DOI: 10.22004/ag.econ.345578
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    References listed on IDEAS

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    1. F. F. Elliott, 1928. "The "Representative Firm" Idea Applied to Research and Extension in Agricultural Economics," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 10(4), pages 483-498.
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    3. Trapnell, Lindsay N. & Ridley, Anna M. & Christy, Brendan P. & White, Robert E., 2006. "Sustainable grazing systems: Economic and financial implications of adopting different grazing systems in north-east Victoria," 2006 Conference (50th), February 8-10, 2006, Sydney, Australia 139914, Australian Agricultural and Resource Economics Society.
    4. Manning H. Becker, 1963. "Discussion: Representative Farms—Guides for Decision Making?," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 45(5), pages 1455-1457.
    5. Harold O. Carter, 1963. "Representative Farms—Guides for Decision Making?," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 45(5), pages 1448-1455.
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