Integrated analysis of profitable stocking‐rate decisions in pasture‐based dairy systems

Abstract

AbstractA nonlinear optimization model of a pasture‐based dairy farm, located in the Waikato region of New Zealand, is used to provide an integrated analysis of profitable stocking‐rate decisions for pasture‐based dairy production, across a range of alternative milk and nitrogen fertilizer prices. Previous research has identified that operating profit increases either in a linear or concave fashion as stocking rate is lifted. This study shows that both views are relevant, depending on the magnitude of milk and nitrogen fertilizer prices. A lower milk price and/or higher per‐unit cost for nitrogen fertilizer reduces profit at higher stocking rates, as the cost of maintaining a larger herd through pronounced feed deficits is magnified. In contrast to previous research, nitrogen fertilizer and imported supplement are shown to be highly complementary strategies under profitable farm management. Model output demonstrates that decreasing stocking rates to reduce leaching, in most cases, will impose a cost in terms of both production and profit. Overall, this work indicates the key importance of stocking‐rate decisions to profitable grazing strategies, relative to those concerning milk per cow. Nevertheless, it is the inherent linkages between stocking rate and the multiple elements of a grazing system that infers this importance, highlighting the need to carefully consider all management levers.