Evaluating the business risk associated with feeding supplements
to dairy cows on pasture
D. Laborde, N.M. Shadbolt and W.J. Parker
Department of Agribusiness and Resource Management, Massey
University, Palmerston North
Proceedings of the New Zealand Society of Animal Production. 1998,
58: 125-127
The beta analysis technique provides a practical tool for
evaluating the business risk associated with feeding supplements to
dairy cows. The break-even cost, the expected profitability and the
probability of making a profit can all be derived by predicting the
marginal milksolids (MS) response, and applying prices for MS and
supplements. The range of possible outcomes is simulated from specified
maximum and minimum values, and the associated response distribution for
each of these variables. The profitability of feeding maize silage on a
market milk supply dairy farm was used to demonstrate the possible
application of formal risk analysis to dairy herd management with a 50%
spring: 50% autumn calving pattern. To be profitable, the marginal
response to maize silage has to be maximised when no milk premium is
paid, but, in the months when a premium is earnt, the risk of not making
a profit is small.
Keywords: NZSAPAB;
dairy supplements, risk, pastoral systems.
Last Updated 12-09-1998
