Plan conservatively when setting forward contracts for beef production from pasture

Abstract

with the inherent variability in pastoral farming. This paper addresses: 1) the percentage of a mob (70, 80 or 90%) to select for a supply contract and 2) methods to decide on the number of animals to supply (stocking rate), given uncertain pasture growth. Riverside Farm pasture growth data were used to simulate a 100 ha finishing block. A meat company winter contract was used with steers contracted on 1 April for supply in mid July and mid August. Analyses were perfbrmed using the Stockpol model. Analyses showed grain supplements to ensure 90% of the mob achieved contract weights would increase profit by about $9000 at all stocking rates (1 S-2.5 steers/ha) compared with accepting only 70% of animals achieving contract weight. Stockpol-predicted profits for 4 stocking rates (1.8, 2.0, 2.2 and 2.5 steers/ha) given 1000 possible outlooks for pasture growth showed the optimum stocking rate derived using average pasture growth overestimated the optimum under uncertain pasture growth by about 10%. The more conservative stocking rates carried less financial risk in years of below-average pasture growth. Keywords: contract, model, pasture growth, risk, steer, supplementation, variability