An economic analysis of options for utilising additional land on a high rainfall Gippsland dairy farm
AbstractA range of options for utilising additional land on a dairy farm in the high rainfall area of Gippsland were analysed. The aim was to determine if additional land may assist the owners/operators in maintaining or increasing profit in the medium term (5-10 years). Historical trends have been towards fewer, larger, more intensive enterprises, and this project studies the value of additional land in continuing or altering this trend. A case study farm and spreadsheet modelling approach was used to examine these issues. Five different uses for additional land were identified by an expert steering committee, and were compared to the base farm system over a 10-year development period. The results suggest that expanding the milking area by purchasing additional land without a significant increase in herd size (2A) increased annual operating profit by approximately $70,000/year without increasing variability when compared to the base farm system. This was the only option examined to earn a high enough internal rate of return on additional capital investment to justify the investment without capital gains. Additional milking area with a substantial increase in stocking rate (2C) significantly reduced annual operating profit (by approximately $70,000/year) and notably increased the variability of these returns. The purchase of an outblock for conserved fodder production improved profitability, but would require some capital gains to be an attractive option on profit measures alone. The most appropriate changes to dairy farm businesses in response to changes in the operating environment will vary from farm to farm. The analysis indicated that simple following previous industry trends may not be appropriate on many farms. Optimising the amount of home grown feed and efficiently using purchased supplements are important, particularly if the milk produced is subject to the fluctuations of an export milk price.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Australian Agricultural and Resource Economics Society in its series 2010 Conference (54th), February 10-12, 2010, Adelaide, Australia with number 59164.
Date of creation: 2010
Date of revision:
Contact details of provider:
Postal: AARES Central Office Manager, Crawford School of Public Policy, ANU, Canberra ACT 0200
Phone: 0409 032 338
Web page: http://www4.agr.gc.ca
More information through EDIRC
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-05-22 (All new papers)
You can help add them by filling out this form.
reading list or among the top items on IDEAS.Access and download statistics
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.