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Culling dairy cows as a response to drought in northern Victoria

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  • Marnie Griffith

Abstract

Conditions for the dairy industry in northern Victoria over the past decade have been tough. High prices for feed inputs, especially when combined with low farmgate milk prices, have seen situations where dairy farmers are losing money feeding cows. In this environment, it is natural to consider whether culling in response to drought followed by replacement as conditions return to normal would leave farmers better off. This working paper develops a methodology to quantitatively evaluate culling during drought conditions for the northern Victorian dairy industry. The methodology is applied to two recent years of drought, 2002 03 and 2007 08. While higher feed costs provide reason to cull, this is largely offset by lower cull prices and higher replacement heifer costs. Farmgate milk prices also play an important role. The methodology was extended to consider a two-year drought. It was found that duration of the drought has a potentially large impact on optimal culling response.

Suggested Citation

  • Marnie Griffith, 2010. "Culling dairy cows as a response to drought in northern Victoria," Centre of Policy Studies/IMPACT Centre Working Papers g-200, Victoria University, Centre of Policy Studies/IMPACT Centre.
    • Handle: RePEc:cop:wpaper:g-200
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    References listed on IDEAS

    as
    1. J. Edwin Faris, 1960. "Analytical Techniques Used in Determining the Optimum Replacement Pattern," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 42(4), pages 755-766.
    2. Marnie Griffith, 2010. "Minimum Cost Feeding of Dairy Cows in Northern Victoria," Centre of Policy Studies/IMPACT Centre Working Papers g-195, Victoria University, Centre of Policy Studies/IMPACT Centre.
    3. Oscar R. Burt, 1965. "Optimal Replacement under Risk," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 47(2), pages 324-346.
    4. Armstrong, Dan P. & Ho, Christie K.M. & Doyle, Peter T. & Malcolm, Bill & Gibb, I. & Brown, Stuart, 2005. "Analysing drought impacts and recovery options by adapting a dairy farming systems modelling approach," AFBM Journal, Australasian Farm Business Management Network, vol. 2(01), pages 1-6.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    dairy system; optimal replacement; drought;
    All these keywords.

    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment
    • Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water

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