Economic evaluation of alternative stocking rates on North Island dairy farms

Abstract

There has been a large volume of research concentrated within the Dairy Industry relating individual cow performance under differing planes of nutrition, grazing intensities and management systems with various measures of technical efficiency. To the writer’s knowledge however, little formal research has been undertaken in an attempt to relate these advances in dairy cow technology to the real world situation of a production unit in an economic environment.

Graham (1964) investigated the relationship between varying rates of fertilizer and levels of stocking using economic criteria. Smith (1970) also compared four levels of fertilizer application and two levels of stocking using similar criteria. However, neither of these studies completed the investigation of the functional relationships between the inputs they considered and neither made any attempt to analyse the effect altering the level of these inputs had on other relationships within the production unit.

The difficulty facing the extension worker there-force in applying the research findings to the farm situation, was in not knowing to what extent increased fertilizer levels, stocking rates and other technological advances should be encourage when there was no information available as to the point at which the technical criteria become economically unacceptable.

This was the writer’s experience while engaged in extension work in the dairying regions of the Waikato Bay of Plenty, and led to the initiation of this study.

Coop (1967) when discussing stocking rates on sheep farms said, “Theoretically increasing stocking rate must break at some point. To know whether a farm is understocked or overstocked requires such as live weight, fleece weight, mortality rate.”

A similar position exists on dairy farms except that a large volume of work has been carried out on the fundamental criteria of work has been carried out on the fundamental criteria of performance and the inter-relationships between them, eg. Scott and Phillips (1959), Brumby (1961), Hutton (1963), McMeekam and Walshe (1963). However, none of these workers attempted to locate Coop’s theoretical breaking point in regard to stocking rate.

More recently Hutton (1968) and Bryant (1969) have attempted to locate limiting factors in the system and evolve ways of exceeding these limitations. However, the research methods used are expensive, time consuming and possibly inefficient, although it is recognized that workers in these fields have as yet no real alternative approach.

This thesis attempts, by modelling these production systems, to help in the process of the economic evaluation of alternative practices and the devising of new management systems by locating the key areas for further research within these systems. It sets out to locate Coop’s breaking point using an economic framework for its analysis.