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Improving the profitability of Waikato dairy farms: Insights from a whole-farm optimisation model

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  • Graeme J. Doole

Abstract

High milk volumes are encouraged in the New Zealand dairy industry to promote market access and utilise processing capacity. A detailed, nonlinear optimisation model of a pasture-based dairy farm in the Waikato region is used to: (1) assess the implications of maximising operating profit, (2) evaluate the cost of maintaining a focus on producing high milk volumes, and (3) characterise general management practices that maximise operating profit. Maximising milk volume within the simulated farm system reduces operating profit by 12%-23%, due to higher production costs. Nine principles for profitable management are developed, based on model output. These focus on the use of a medium to medium-high stocking rate (3-3.7 cows ha-super- - 1) to promote the growth, quality, utilisation, and intake of pasture. Imported concentrate is valuable to augment production in mid-lactation, but it is best to avoid feeding cows to potential given the high cost of supplement.

Suggested Citation

  • Graeme J. Doole, 2015. "Improving the profitability of Waikato dairy farms: Insights from a whole-farm optimisation model," New Zealand Economic Papers, Taylor & Francis Journals, vol. 49(1), pages 44-61, April.
    • Handle: RePEc:taf:nzecpp:v:49:y:2015:i:1:p:44-61
    DOI: 10.1080/00779954.2014.907863
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    Cited by:

    1. 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.
    2. Addisu H. Addis & Hugh T. Blair & Paul R. Kenyon & Stephen T. Morris & Nicola M. Schreurs, 2021. "Optimization of Profit for Pasture-Based Beef Cattle and Sheep Farming Using Linear Programming: Model Development and Evaluation," Agriculture, MDPI, vol. 11(6), pages 1-16, June.

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