• Login
    View Item 
    •   Home
    • Massey Documents by Type
    • Theses and Dissertations
    • View Item
    •   Home
    • Massey Documents by Type
    • Theses and Dissertations
    • View Item
    JavaScript is disabled for your browser. Some features of this site may not work without it.

    An investment in irrigation by dairy farmers : the probability distribution of the time to payback : a thesis presented in partial fulfilment of the requirements for the degree of Masters in Applied Science in Agricultural Systems and Management at Massey University

    Icon
    View/Open Full Text
    01_front.pdf (1.570Mb)
    02_whole.pdf (19.74Mb)
    Export to EndNote
    Abstract
    In recent years many dairy famers, particularly in Northland, have expressed an interest in investing in irrigation. The main financial risk that dairy farmers face when considering such an investment arises from uncertainty about the stream of future returns to irrigation. This uncertainty primarily results from the variability of dryland pasture growth rates during the summer months. Obviously, the more prone an area is to drought or dry summer conditions the more profitable investment in irrigation is likely to be. Uncertainty as to the future values of the costs and returns associated with dairying is a second source of risk. In this study a methodology has been developed to evaluate the economic benefits of an investment in irrigation which takes into account variation in climatic conditions during the summer, and which allows the effects of changes in other key variables to be assessed. Modelling techniques are used, in conjunction with historic meteorological data, to simulate pasture growth rates and derive the resultant farm gross margins, for both a dryland and an irrigated system, over a number of seasons. A Monte Carlo style simulation is then used to obtain the probability distribution of the time to payback. The methodology was applied to a case dairy farm., based at Rukuhia in the Waikato, in order to illustrate the process. At current (1995/6) prices a $325,000 investment in irrigation at Rukuhia is estimated to take somewhere between three and ten years to repay its cost, with a 97% probability that payback will occur in the next four to seven seasons. Sensitivity analysis showed that, whilst interest rates, capital investment costs, and the manner in which the transition to an irrigated production system is achieved are important, the milksolids payout is the most significant factor in determining the likely time to payback.
    Date
    1996
    Author
    Stachurski, Lorraine Joan
    Rights
    The Author
    Publisher
    Massey University
    URI
    http://hdl.handle.net/10179/5731
    Collections
    • Theses and Dissertations
    Metadata
    Show full item record

    Copyright © Massey University
    | Contact Us | Feedback | Copyright Take Down Request | Massey University Privacy Statement
    DSpace software copyright © Duraspace
    v5.7-2020.1-beta1
     

     

    Tweets by @Massey_Research
    Information PagesContent PolicyDepositing content to MROCopyright and Access InformationDeposit LicenseDeposit License SummaryTheses FAQFile FormatsDoctoral Thesis Deposit

    Browse

    All of MROCommunities & CollectionsBy Issue DateAuthorsTitlesSubjectsThis CollectionBy Issue DateAuthorsTitlesSubjects

    My Account

    LoginRegister

    Statistics

    View Usage Statistics

    Copyright © Massey University
    | Contact Us | Feedback | Copyright Take Down Request | Massey University Privacy Statement
    DSpace software copyright © Duraspace
    v5.7-2020.1-beta1