Identifying risk-efficient strategies using stochastic frontier analysis and simulation: An application to irrigated cropping in Australia

In irrigated cropping, as with any other industry, profit and risk are inter-dependent. An increase in profit would normally coincide with an increase in risk, and this means that risk can be traded for profit. It is desirable to manage a farm so that it achieves the maximum possible profit for the desired level of risk. This paper identifies risk-efficient cropping strategies that allocate land and water between crop enterprises for a case study of an irrigated farm in Southern Queensland, Australia. This is achieved by applying stochastic frontier analysis to the output of a simulation experiment. The simulation experiment involved changes to the levels of business risk by systematically varying the crop sowing rules in a bioeconomic model of the case study farm. This model utilises the multi-field capability of the process based Agricultural Production System Simulator (APSIM) and is parameterised using data collected from interviews with a collaborating farmer. We found sowing rules that increased the farm area sown to cotton caused the greatest increase in risk-efficiency. Increasing maize area also improved risk-efficiency but to a lesser extent than cotton. Sowing rules that increased the areas sown to wheat reduced the risk-efficiency of the farm business. Sowing rules were identified that had the potential to improve the expected farm profit by ca. $50,000 Annually, without significantly increasing risk. The concept of the shadow price of risk is discussed and an expression is derived from the estimated frontier equation that quantifies the trade-off between profit and risk.

Risk management strategies using seasonal climate forecasting in irrigated cotton production: a tale of stochastic dominance.

Decision-making in agriculture is carried out in an uncertain environment with farmers often seeking information to reduce risk. As a result of the extreme variability of rainfall and stream-flows in north-eastern Australia, water supplies for irrigated agriculture are a limiting factor and a source of risk. The present study examined the use of seasonal climate forecasting (SCF) when calculating planting areas for irrigated cotton in the northern Murray Darling Basin. Results show that minimising risk by adjusting plant areas in response to SCF can lead to significant gains in gross margin returns. However, how farmers respond to SCF is dependent on several other factors including irrigators’ attitude towards risk.

Influence of plant traits on production costs and profitability of strawberry in southeast Queensland.

In Queensland the subtropical strawberry ( Fragaria * ananassa) breeding program aims to combine traits into novel genotypes that increase production efficiency. The contribution of individual plant traits to cost and income under subtropical Queensland conditions was investigated, with the overall goal of improving the profitability of the industry through the release of new strawberry cultivars. The study involved specifying the production and marketing system using three cultivars of strawberry that are currently widely grown annually in southeast Queensland, developing methods to assess the economic impact of changes to the system, and identifying plant traits that influence outcomes from the system. From May through September P (price; $ punnet -1), V (monthly mass; tonne of fruit on the market) and M (calendar month; i.e. May=5) were found to be related ( r2=0.92) by the function (SE) P=4.741(0.469)-0.001630(0.0005) V-0.226(0.102) M using data from 2006 to 2010 for the Brisbane central market. Both income and cost elements in the gross margin were subject to sensitivity analysis. 'Harvesting' and 'Handling/Packing' 'Groups' of 'Activities' were the major contributors to variable costs (each >20%) in the gross margin analysis. Within the 'Harvesting Group', the 'Picking Activity' contributed most (>80%) with the trait 'display of fruit' having the greatest (33%) influence on the cost of the 'Picking Activity'. Within the 'Handling/Packing Group', the 'Packing Activity' contributed 50% of costs with the traits 'fruit shape', 'fruit size variation' and 'resistance to bruising' having the greatest (12-62%) influence on the cost of the 'Packing Activity'. Non-plant items (e.g. carton purchases) made up the other 50% of the costs within the 'Handling/Packing Group'. When any of the individual traits in the 'Harvesting' and 'Handling/Packing' groups were changed by one unit (on a 1-9 scale) the gross margin changed by up to 1%. Increasing yield increased the gross margin to a maximum (15% above present) at 1320 g plant -1 (94% above present). A 10% redistribution of total yield from September to May increased the gross margin by 23%. Increasing fruit size increased gross margin: a 75% increase in fruit size (to ~30 g) produced a 22% increase in the gross margin. The modified gross margin analysis developed in this study allowed simultaneous estimation of the gross margin for the producer and gross value of the industry. These parameters sometimes move in opposite directions.

A participatory whole farm modelling approach to understand impacts and increase preparedness to climate change in Australia

This study presents the use of a whole farm model in a participatory modelling research approach to examine the sensitivity of four contrasting case study farms to a likely climate change scenario. The newly generated information was used to support discussions with the participating farmers in the search for options to design more profitable and sustainable farming systems in Queensland Australia. The four case studies contrasted in key systems characteristics: opportunism in decision making, i.e. flexible versus rigid crop rotations; function, i.e. production of livestock or crops; and level of intensification, i.e. dryland versus irrigated agriculture. Tested tactical and strategic changes under a baseline and climate change scenario (CCS) involved changes in the allocation of land between cropping and grazing enterprises, alternative allocations of limited irrigation water across cropping enterprises, and different management rules for planting wheat and sorghum in rainfed cropping. The results show that expected impacts from a likely climate change scenario were evident in the following increasing order: the irrigated cropping farm case study, the cropping and grazing farm, the more opportunistic rainfed cropping farm and the least opportunistic rainfed cropping farm. We concluded that in most cases the participating farmers were operating close to the efficiency frontier (i.e. in the relationship between profits and risks). This indicated that options to adapt to climate change might need to evolve from investments in the development of more innovative cropping and grazing systems and/or transformational changes on existing farming systems. We expect that even though assimilating expected changes in climate seems to be rather intangible and premature for these farmers, as innovations are developed, adaptation is likely to follow quickly. The multiple interactions among farm management components in complex and dynamic farm businesses operating in a variable and changing climate, make the use of whole farm participatory modelling approaches valuable tools to quantify benefits and trade-offs from alternative farming systems designs in the search for improved profitability and resilience.

Study of the structure and function of the sheath of tropically adapted bulls and risk factors for preputial eversion and preputial prolapse

Preputial prolapse is an obvious condition affecting bulls from many breeds. Unfortunately, the losses in production and welfare concerns associated with preputial prolapse can remain undetected for long periods of time in the extensive beef areas of northern Australia where the bulls are not inspected regularly. Thus, there is a critical need to identify the structural factors predisposing to preputial prolapse in young bulls so that they can be culled early. Despite there being no firm scientific evidence of an association between preputial eversion and preputial prolapse, it seems logical that the increased exposure of the sensitive prepuce as a consequence of preputial eversion may increase the risk of bulls developing preputial pathology, in particular preputial prolapse. This may be particularly relevant in Bos indicus bulls as they have a more pendulous sheath and thus eversion of the prepuce may be associated with a greater risk of injury to the prepuce compared to that in Bos taurus bulls. Further, studies of preputial eversion in Bos taurus bulls have concluded that there is an association between polledness and increased prevalence and severity (length of everted prepuce and duration of eversion) of preputial eversion due primarily to the absence or poor development of the caudal preputial muscles. No similar definitive work in Bos indicus bulls has been conducted and thus anatomical studies reported in this thesis were conducted to determine if a similar association occurred in Bos indicus bulls. A survey of a sample of large beef breeding herds in northern Australia found that preputial prolapse is a significant problem in Bos indicus and Bos indicus derived bulls and affected both young and older bulls. The importance of preputial prolapse confirmed the value of further research into the causes of this problem. A series of anatomical studies confirmed that preputial eversion in Bos indicus derived bulls was not more prevalent in polled bulls than horned bulls and was not associated with deficiency of the caudal preputial muscles as was established in Bos taurus bulls. An anatomical study of Bos indicus derived bulls with preputial prolapse found that preputial prolapse occurred in horned bulls of varying ages and these bulls did not have any evidence of deficiency in the caudal preputial muscles. However, preputial prolapse was observed in young polled bulls that had poorly developed or absent caudal preputial muscles. It was concluded that deficiency of the caudal preputial muscles in polled Bos indicus derived bulls may predispose to preputial prolapse at an early age, but no predisposing anatomical factors were found for horned Bos indicus derived bulls. In these studies, preputial eversion and preputial prolapse were found in horned Bos indicus derived bulls that did not have any preputial muscle deficiency and it was noted that preputial eversion was not related to the length of the prepuce. Further studies confirmed that preputial eversion was linearly and consistently associated with position of the glans penis within the sheath in Bos indicus derived bulls, and movement of the glans penis towards the preputial orifice consistently resulted in preputial eversion in these bulls. A method to objectively measure the relationship between movement of the glans penis within the sheath and preputial eversion was developed. Studies in humans have linked function of some abdominal muscles to function of the pelvic organs. This relationship was investigated in Bos indicus derived bulls to determine whether the function of specific abdominal muscles affected position of the penis in the sheath. Using the method developed to objectively measure the relationship between penis movement and preputial eversion, the abdominal muscles that potentially were associated with movement of the glans penis or preputial eversion were examined but no significant relationships were observed. In the anatomical study of Bos indicus derived bulls not affected with preputial prolapse a more pendulous sheath was associated with increased prevalence of preputial eversion. This relationship was confirmed for horned and polled bulls in the penis movement studies. Bos indicus derived bulls with more pendulous sheaths evert their prepuces more than bulls with less pendulous sheaths thus increasing the risk of damage to the prepuce either from the environment, other bulls, or from them inadvertently stepping on the everted prepuce when they get to their feet. Culling Bos indicus derived bulls with more pendulous sheaths should reduce the incidence of preputial eversion and possibly preputial prolapse. The anatomical study of Bos indicus derived bulls that did not have preputial prolapse demonstrates that there are herds of bulls where the polled bulls do not have any evidence of deficiency of the caudal preputial iv muscles. There is a need to develop a practical and cost effective test to identify polled Bos indicus bulls that have a deficiency in their caudal preputial muscles.

Animal-Level Factors Affecting Ovarian Function in Bos indicus Heifers Treated to Synchronize Ovulation with Intravaginal Progesterone-Releasing Devices and Oestradiol Benzoate

The primary objective of this study was to investigate the impact of animal-level factors including energy balance and environmental/management stress, on the ovarian function of Bos indicus heifers treated to synchronize ovulation. Two-year-old Brahman (BN) (n = 30) and BN-cross (n = 34) heifers were randomly allocated to three intravaginal progesterone-releasing device (IPRD) treatment groups: (i) standard-dose IPRD [Cue-Mate (R) (CM) 1.56 g; n = 17]; (ii) half-dose IPRD [0.78 g progesterone (P4); CM 0.78 g; n = 15]; (iii) half-dose IPRD + 300 IU equine chorionic gonadotrophin at IPRD removal (CM 0.78 g + G; n = 14); (iv) and a control group, 2x PGF2a [500 mu g prostaglandin F2a (PGF2a)] on Day -16 and -2 (n = 18). Intravaginal progesterone-releasing device-treated heifers received 250 mu g PGF2a at IPRD insertion (Day -10) and IPRD removal (Day -2) and 1 mg oestradiol benzoate on Day -10 and -1. Heifers were managed in a small feedlot and fed a defined ration. Ovarian function was evaluated by ultrasonography and plasma P4 throughout the synchronized and return cycles. Energy balance was evaluated using plasma insulin-like growth factor 1 (IGF-I) and glucose concentrations. The impact of environmental stressors was evaluated using plasma cortisol concentration. Heifers that had normal ovarian function had significantly higher IGF-I concentrations at commencement of the experiment (p = 0.008) and significantly higher plasma glucose concentrations at Day -2 (p = 0.040) and Day 4 (p = 0.043), than heifers with abnormal ovarian function. There was no difference between the mean pre-ovulatory cortisol concentrations of heifers that ovulated or did not ovulate. However, heifers that ovulated had higher cortisol concentrations at Day 4 (p = 0.056) and 6 (p = 0.026) after ovulation than heifers that did not ovulate.

Stochastic model for simulating maize yield

Maize is one of the most important crops in the world. The products generated from this crop are largely used in the starch industry, the animal and human nutrition sector, and biomass energy production and refineries. For these reasons, there is much interest in figuring the potential grain yield of maize genotypes in relation to the environment in which they will be grown, as the productivity directly affects agribusiness or farm profitability. Questions like these can be investigated with ecophysiological crop models, which can be organized according to different philosophies and structures. The main objective of this work is to conceptualize a stochastic model for predicting maize grain yield and productivity under different conditions of water supply while considering the uncertainties of daily climate data. Therefore, one focus is to explain the model construction in detail, and the other is to present some results in light of the philosophy adopted. A deterministic model was built as the basis for the stochastic model. The former performed well in terms of the curve shape of the above-ground dry matter over time as well as the grain yield under full and moderate water deficit conditions. Through the use of a triangular distribution for the harvest index and a bivariate normal distribution of the averaged daily solar radiation and air temperature, the stochastic model satisfactorily simulated grain productivity, i.e., it was found that 10,604 kg ha(-1) is the most likely grain productivity, very similar to the productivity simulated by the deterministic model and for the real conditions based on a field experiment. © 2012 American Society of Agricultural and Biological Engineers.

A comparison of stocking methods for beef production in northern Australia: pasture and soil surface condition responses

Historical stocking methods of continuous, season-long grazing of pastures with little account of growing conditions have caused some degradation within grazed landscapes in northern Australia. Alternative stocking methods have been implemented to address this degradation and raise the productivity and profitability of the principal livestock, cattle. Because information comparing stocking methods is limited, an evaluation was undertaken to quantify the effects of stocking methods on pastures, soils and grazing capacity. The approach was to monitor existing stocking methods on nine commercial beef properties in north and south Queensland. Environments included native and exotic pastures and eucalypt (lighter soil) and brigalow (heavier soil) land types. Breeding and growing cattle were grazed under each method. The owners/managers, formally trained in pasture and grazing management, made all management decisions affecting the study sites. Three stocking methods were compared: continuous (with rest), extensive rotation and intensive rotation (commonly referred to as 'cell grazing'). There were two or three stocking methods examined on each property: in total 21 methods (seven continuous, six extensive rotations and eight intensive rotations) were monitored over 74 paddocks, between 2006 and 2009. Pasture and soil surface measurements were made in the autumns of 2006, 2007 and 2009, while the paddock grazing was analysed from property records for the period from 2006 to 2009. The first 2 years had drought conditions (rainfall average 3.4 decile) but were followed by 2 years of above-average rainfall. There were no consistent differences between stocking methods across all sites over the 4 years for herbage mass, plant species composition, total and litter cover, or landscape function analysis (LFA) indices. There were large responses to rainfall in the last 2 years with mean herbage mass in the autumn increasing from 1970 kg DM ha(-1) in 2006-07 to 3830 kg DM ha(-1) in 2009. Over the same period, ground and litter cover and LFA indices increased. Across all sites and 4 years, mean grazing capacity was similar for the three stocking methods. There were, however, significant differences in grazing capacity between stocking methods at four sites but these differences were not consistent between stocking methods or sites. Both the continuous and intensive rotation methods supported the highest average annual grazing capacity at different sites. The results suggest that cattle producers can obtain similar ecological responses and carry similar numbers of livestock under any of the three stocking methods.

Supplementation of cattle fed tropical grasses with microalgae increases microbial protein production and average daily gain

A series of 3 experiments were conducted to evaluate the use of microalgae as supplements for ruminants consuming low-CP tropical grasses. In Exp. 1, the chemical composition and in vitro protein degradability of 9 algae species and 4 protein supplements were determined. In Exp. 2, rumen function and microbial protein (MCP) production were determined in Bos indicus steers fed speargrass hay alone or supplemented with Spirulina platensis, Chlorella pyrenoidosa, Dunaliella salina, or cottonseed meal (CSM). In Exp. 3, DMI and ADG were determined in B. indicus steers fed speargrass hay alone or supplemented with increasing amounts of NPN (urea combined with ammonia sulfate), CSM, or S. platensis. In Exp. 1, the CP content of S. platensis and C. pyrenoidosa (675 and 580 g/kg DM) was highest among the algae species and higher than the other protein supplements evaluated, and Schizochytrium sp. had the highest crude lipid (CL) content (198 g/kg DM). In Exp. 2, S. platensis supplementation increased speargrass hay intake, the efficiency of MCP production, the fractional outflow rate of digesta from the rumen, the concentration of NH3N, and the molar proportion of branched-chain fatty acids in the rumen fluid of steers above all other treatments. Dunaliella salina acceptance by steers was low and this resulted in no significant difference to unsupplemented steers for all parameters measured for this algae supplement. In Exp. 3, ADG linearly increased with increasing supplementary N intake from both S. platensis and NPN, with no difference between the 2 supplements. In contrast, ADG quadratically increased with increasing supplementary N intake from CSM. It was concluded that S. platensis and C. pyrenoidosa may potentially be used as protein sources for cattle grazing low-CP pastures.

Sorghum Crop Modeling and Its Utility in Agronomy and Breeding

Crop models are simplified mathematical representations of the interacting biological and environmental components of the dynamic soil–plant–environment system. Sorghum crop modeling has evolved in parallel with crop modeling capability in general, since its origins in the 1960s and 1970s. Here we briefly review the trajectory in sorghum crop modeling leading to the development of advanced models. We then (i) overview the structure and function of the sorghum model in the Agricultural Production System sIMulator (APSIM) to exemplify advanced modeling concepts that suit both agronomic and breeding applications, (ii) review an example of use of sorghum modeling in supporting agronomic management decisions, (iii) review an example of the use of sorghum modeling in plant breeding, and (iv) consider implications for future roles of sorghum crop modeling. Modeling and simulation provide an avenue to explore consequences of crop management decision options in situations confronted with risks associated with seasonal climate uncertainties. Here we consider the possibility of manipulating planting configuration and density in sorghum as a means to manipulate the productivity–risk trade-off. A simulation analysis of decision options is presented and avenues for its use with decision-makers discussed. Modeling and simulation also provide opportunities to improve breeding efficiency by either dissecting complex traits to more amenable targets for genetics and breeding, or by trait evaluation via phenotypic prediction in target production regions to help prioritize effort and assess breeding strategies. Here we consider studies on the stay-green trait in sorghum, which confers yield advantage in water-limited situations, to exemplify both aspects. The possible future roles of sorghum modeling in agronomy and breeding are discussed as are opportunities related to their synergistic interaction. The potential to add significant value to the revolution in plant breeding associated with genomic technologies is identified as the new modeling frontier.