Tower silo farming in New Zealand. Part II : economic possibilities

Abstract

This is the second report that investigates into tower silo farming in New Zealand. As stressed in the first report, there is insufficient evidence from the past operation of these farming methods in New Zealand to assess their economic profitability. Therefore, three budget situations are explored in detail: winter beef fattening, wintering store beef weaners, and town supply dairy; and the relative profitability of the system is assessed by this method. It appears that in most cases the initial investment in tower silos will bring about considerable changes in the whole management system. Thus, it is imperative to take into account all the quantifiable benefits and costs of any given tower silo system by looking at most items of the whole farm budget. For this reason, the approach used here has been to attempt to estimate the profitability of the whole farm investment including tower silos and associated buildings and plant. This farm net profit level with silos can be compared with that level expected for the same farm without silos, farmed by more conventional methods, and any difference in favour of the former can be imputed as a return on this incremental farm capital investment, which will be then available for comparison with rates obtainable in other alternative on-farm or off-farm investments.