Assessment of production risk in grazing models

This paper presents a series of Monte Carlo computer experiments designed to determine the effect of irrigation, stocking rate and lamb drafting weight on the profitability and productivity of a sheep grazing enterprise. The experiments were performed on a hypothetical farm in the Canterbury Plains of New Zealand. Pasture growth parameters were estimated based on a 21-year series of monthly measurements and were used to introduce production risk into the model. The paper demonstrates that, independently of the risk attitude of the producer, it is important to account for the stochastic nature of the environment in an agricultural management model.