Several grazing strategies are recommended to manage sustainably for rainfall variability in northern Australia, but there is little objective data on their profitability relative to less sustainable management systems such as heavy stocking. In 1997, a large cattle grazing trial was initiated in northern Queensland to quantify the relative performance of a range of grazing strategies in a variable climate. These strategies were (i) moderate stocking (MSR) stocked at the calculated long-term carrying capacity (LTCC), (ii) heavy stocking (HSR) at twice LTCC, (iii) rotational wet-season spelling (R/Spell) at 1.5 LTCC, (iv) variable stocking (VAR), with stocking rates adjusted in May based on available forage and (v) a southern oscillation index (SOI)-variable strategy, with stocking rates adjusted in November based on available forage and SOI-based seasonal forecasts.Rainfall varied over the 12-year trial period, with sequences of dry and wet years. Gross margins (GM) in the HSR were initially high but collapsed in drier years due to high costs and reduced product value. GMs only recovered in later years with a reduced stocking rate and increased rainfall. The VAR and SOI were also initially very profitable, but GMs plunged as rainfall declined due to reduced animal performance and the sale of poor-condition cattle. This sharp cut in stocking rates nevertheless allowed GMs to recover well in subsequent years. In the MSR, GMs remained relatively constant across most years due to low costs and a higher product value. The R/Spell also performed relatively well despite being compromised by an ill-timed fire, drought and the subsequent sale of poor-condition cattle.
A knowledge of farmers' goals provides an important basis for understanding farmers' preferences for, and choices among, various farm adjustment strategies. Such information is also valuable in estimating the acceptability to farmers of various government measures to assist rural adjustment. The goals of Queensland graziers, with and without a history of farm expansion, are compared. Different adjustment strategies are analysed in terms of the ways in which they satisfy different individual goals. A dimensional analysis of relationships among goals and adjustment strategies reveals that, for those willing to expand but without a history of expansion, income and social goals are at odds with each other. For these graziers, property expansion seemed to be the strategy most likely to meet both these goals. For graziers with a history of expansion, income goals were complementary with social goals.
This article considers the application of discounting techniques to the decision faced by a firm in determining whether to lease or buy capital equipment. Integral to the analysis is the notion of the internal rate of return. The article concludes by considering the interpretation of the concept, demonstrating that it provides a measure of the opportunity cost associated with a purchase decision.
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