Open AccessFinancial analysis of pasture improvement on Earnscleugh Station
Author(s) -
Graeme Ogle,
B.E. Allan,
Amber Campbell,
J. R. Bates
Publication year - 2000
Publication title -
proceedings of the new zealand grassland association
Language(s) - English
Resource type - Journals
eISSN - 1179-4577
pISSN - 0369-3902
DOI - 10.33584/jnzg.2000.62.2368
Subject(s) - pasture , stock (firearms) , marginal product , agricultural economics , productivity , net income , business , economics , agricultural science , production (economics) , environmental science , finance , forestry , geography , economic growth , archaeology , macroeconomics
The financial benefit of improving depleted pastures in the New Zealand high country is considered. Two models were developed based on Earnscleugh Station in Central Otago using RANGEPACK HerdEcon with data gathered from a large-scale pasture development trial. One model developed 721 ha of extra pastures using the costs and production gains expected while the other did not undertake development. The cash surplus accumulated after taxation was 4.7% higher after 10 years if no development occurred while the Net worth was 1% better if nothing was done. Reducing developed costs to $50/ha did not achieve a payback within 10 years whereas a marginal increase in stock numbers of 2.25 stock units achieved this. It was estimated that some of the landforms on Earnscleugh Station's pasture development trial did achieve this level of productivity. The overall poor performance of the development simulations was concluded to be a result of developing marginal landforms, which although cheap to develop make the scenario unprofitable. Keywords: development, financial analysis, fine wool, merino, pasture improvement, price variability