Simulation model and economic evaluation of management strategies for improvement of a beef grazing system in the "cerrado" area of the Central Brasil Region : a thesis submitted in partial fulfilment of the requirements for the degree of Master of Agricultural Science in the University of Canterbury [Lincoln College]

Abstract

The most important factor in the improvement of the traditional system of beef production in the “cerrado" area of the Central Brazil Region is the introduction of improved pasture. Both direct establishment and establishment through cropping have been the two approaches taken to introduce improved pasture. Risk related to crop yield and beef prices influence the choice of the management strategies.

To assess the management strategies to improve the traditional system the EMBRAPA model was modified to carry out the study. The results from experimenting with a stochastic bio-economic simulation model indicated that under the current situation of beef prices, inflation and loan policies, the total replacement of the "cerrado" by way of pasture improvement is highly profitable. Although introducing pasture by way of cropping had a marked degree of risk, it still showed a better pattern of profit and cash-flow when compared with establishing pasture directly. Variation in beef prices did not appear to be an important factor in farm development, but starting the improvement of the system in the top of beef price cycle was shown to be a good strategy.

The strategy of buying in breeding cows to increase stock numbers provided a better economic response than any policy comprising breeding up. Selling fat steers at 46 months of age gave better economic results than any other selling strategy.

Although the total replacement of the "cerrado” by improved pasture is profitable, the rate of land development should be adjusted for each particular farm situation in order to provide a balance in the cash flow.

The lack of relevant information on biological components and from the real system constituted a difficulty in building and validating the model. However, the flexibility incorporated in the model makes it potentially useful for advisory purposes.