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RESEARCH ARTICLE
Contents Vol 31(1)

Wet season resting – economic insights from scenario modelling

N. D. MacLeod A D , B. S. Nelson B , J. G. McIvor A and J. P. Corfield C
+ Author Affiliations
- Author Affiliations

A CSIRO Sustainable Ecosystems, QBP Blg, 306 Carmody Rd, St Lucia, Qld 4067, Australia.

B Queensland Department of Primary Industries and Fisheries, Charters Towers, Qld 4820, Australia.

C CSIRO Sustainable Ecosystems, Private Mail Bag, PO Aitkenvale, Qld 4814, Australia.

D Corresponding author. Email: Neil.Macleod@csiro.au

The Rangeland Journal 31(1) 143-150 https://doi.org/10.1071/RJ08043
Submitted: 9 September 2008  Accepted: 3 February 2009   Published: 26 March 2009

Abstract

Pasture degradation, particularly that attributable to overgrazing, is a significant problem across the northern Australian rangelands. Although grazing studies have identified the scope for wet season resting strategies to be used to rehabilitate degraded pastures, the economic outcome of these strategies has not been extensively demonstrated. An exploratory study of the prospective economic value of wet season resting is presented using an economic simulation model of a 28 000 ha beef enterprise located in the Charters Towers region of north-eastern Australia to explore seven hypothetical scenarios centred on the projected performance of a wet season resting strategy. A series of 20-year simulations for a range of pasture recovery profiles, stocking capacity, animal productivity responses, beef prices and agistment options are compared with a baseline scenario of taking no action. Estimates of the net present value of the 20-year difference in total enterprise gross margins between the various resting options and the ‘do nothing’ option identify that wet season resting can offer a positive economic return for the range of scenarios examined, although this is contingent on the assumptions that are made concerning the trajectories of change in carrying capacity and animal productivity. Some implications for management and policy making to support the practical implementation of wet season resting strategies are discussed.

Additional keywords: economics, rangelands.


Acknowledgments

The valuable contribution of QDPIF and CSIRO colleagues Geoffrey Fordyce, Felicity Hamlyn-Hill, Cam McDonald and Mick Stephens to the work covered in this manuscript is acknowledged. Two anonymous reviewers provided valuable constructive criticism and comments on an earlier version of this manuscript.


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1One adult equivalent represents the approximate annual feed demand of a 455 kg steer.

2The present value PV of a future sum FVn is an amount that, if invested at an interest rate i for a period of n, would grow to FVn, represented by the formula PV = FVn/(1 + i)n, and the interest rate i is referred to as the ‘discount rate’. Net present value (NPV) is the sum of annual PV values over a time horizon 1 to n years.

*All values are in Australian dollars.

3For example, the annual supplementary feeding costs per breeder carried for Scenarios 1 and 7B were estimated to $77.86 and $147.69, respectively, by year 10 of the simulation period.