Using simulation to assess the risks and returns from pasture improvement for beef production in agriculturally underdeveloped regions

Abstract

Improved pasture technology for beef production provides the potential for significant increases in food production in many agriculturally underdeveloped regions of the world. However, if extension officers and farmers are to accept new pasture technology they must be convinced that it is superior to the traditional system, not only in terms of expected return but also in terms of its relative riskiness. This paper describes a simulation model developed to assess the risks and returns from establishing improved pasture in an extensive beef breeding enterprise. Particular attention has been given to modelling the effect of stocking rate policy as this is a major management factor that will affect both the returns and risks associated with pasture improvement. Use of the model is illustrated for an enterprise in northeastern New South Wales, Australia, where much of the beef industry has been tradionally based on poor native pastures.