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Economic analysis of improved perennial pasture systems

Author

Listed:
  • Lewis, Claire
  • Malcolm, Bill
  • Farquharson, Robert J.
  • Leury, Brian
  • Behrendt, Ralph
  • Clark, Steve

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.

Suggested Citation

  • Lewis, Claire & Malcolm, Bill & Farquharson, Robert J. & Leury, Brian & Behrendt, Ralph & Clark, Steve, 2012. "Economic analysis of improved perennial pasture systems," AFBM Journal, Australasian Farm Business Management Network, vol. 9(2), pages 1-19, December.
    • Handle: RePEc:ags:afbmau:143156
    DOI: 10.22004/ag.econ.143156
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    Citations

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    Cited by:

    1. Ludemann, C.I. & Cullen, B.R. & Malcolm, Bill & Smith, K.F., 2013. "Economic values of changes in energy concentration of pasture in contrasting temperate dairy regions in Australia," AFBM Journal, Australasian Farm Business Management Network, vol. 10, pages 1-15.
    2. Tocker, Jonathon & Malcolm, Bill & Heard, J. & Sinnett, A. & Ho, C. & Behrendt, R., 2013. "Profit, cash, wealth and risk implications of changes to a prime lamb business in south-west Victoria," AFBM Journal, Australasian Farm Business Management Network, vol. 10, pages 1-27.
    3. Tocker, Jonathon & Malcolm, B. & Heard, J. & Ho, C. & Behrendt, R., 2022. "Profitable Sheep Farming in South-west Victoria: Specialisation or Diversification Under Volatile Prices, Costs and Climate," AFBM Journal, Australasian Farm Business Management Network, vol. 19(1), April.
    4. Thomas, Dean T. & Flohr, Bonnie M. & Monjardino, Marta & Loi, Angelo & Llewellyn, Rick S. & Lawes, Roger A. & Norman, Hayley C., 2021. "Selecting higher nutritive value annual pasture legumes increases the profitability of sheep production," Agricultural Systems, Elsevier, vol. 194(C).
    5. Ludemann, C.I. & Eckard, R.J. & Cullen, B.R. & Jacobs, J.L. & Malcolm, B. & Smith, K.F., 2015. "Higher energy concentration traits in perennial ryegrass (Lolium perenne L.) may increase profitability and improve energy conversion on dairy farms," Agricultural Systems, Elsevier, vol. 137(C), pages 89-100.
    6. Lewis, C.D. & Jacobs, J.L. & Smith, K.F. & Behrendt, R. & Malcolm, Bill, 2013. "Potential returns and risk of growing aluminium-tolerant lucerne in a grazing system with acidic soils located in the high rainfall zone," AFBM Journal, Australasian Farm Business Management Network, vol. 10, pages 1-15.

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