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Sustainable grazing systems: Economic and financial implications of adopting different grazing systems in north-east Victoria

Author

Listed:
  • Trapnell, Lindsay N.
  • Ridley, Anna M.
  • Christy, Brendan P.
  • White, Robert E.

Abstract

Data from experimental sites at Maindample and Ruffy was extrapolated to a 100 ha paddock on a commercial property. Incorporated into the analyses were risk assessments to allow for sowing failures due to adverse seasonal conditions and price variability for meat and wool during the life of the pasture. Where graziers carried out pasture improvement, the results indicated that changing from Control (low input pastures stocked at a low intensity) to High-input (high stocking rates and fertilizer addition) rather than Medium-input pasture was the more profitable option. In changing to High-input pasture using data from Maindample, a cattle activity using nominal discount rates of 10% per annum required success rates in pasture establishment of ≥ 80% for profitability. For Ruffy cattle, using the same discount rate, the change was profitable for success rates in pasture establishment of ≥ 70%, but lamb and wool activities were only profitable for success rates in pasture establishment of ≥ 90%. Over both sites, Ruffy cattle was the only activity for the change to be profitable for nominal discount rates of 15% per annum, but success rates for pasture establishment would also have to be ≥ 90%. Financial analyses performed on these increases in profitability confirmed that they were feasible because the pay-back periods for deficits incurred during the development and management of the improved pasture were less than the 13 year life of the investments. However, using a contractor to improve the pastures was not feasible because the deficits could not be repaid within the period of the investment. These results support the current low adoption of perennial pastures and have significant implications for catchment management bodies in Victoria and New South Wales where heavy reliance is placed on perennial pastures to improve catchment outcomes.

Suggested Citation

  • 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.
  • Handle: RePEc:ags:aare06:139914
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    Cited by:

    1. 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.

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