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Agronomy Journal Abstract - Economic Analysis

Economic Analysis of Replacing Endophyte-Infected with Endophyte-Free Tall Fescue Pastures


This article in AJ

  1. Vol. 97 No. 3, p. 711-716
    Received: Apr 23, 2004

    * Corresponding author(s): jzhuang@wisc.edu
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  1. Jun Zhuang *a,
  2. Mary A. Marchantb,
  3. Christopher L. Schardlc and
  4. Courtney Murrell Butlerd
  1. a Dep. of Industrial and Systems Engineering, 456B Mechanical Engineering Bldg., 1513 University Ave., Univ. of Wisconsin, Madison, WI 53706-1572
    b Dep. of Agricultural Economics, Univ. of Kentucky, Lexington, KY 40546-0276
    c Dep. of Plant Pathology, Univ. of Kentucky, Lexington, KY 40546-0312
    d Unified Foodservice Purchasing Coop., 12000 West Hwy 42, Goshen, KY 40026


Cattle (Bos taurus) consuming tall fescue pastures infected with the endophyte Neotyphodium coenophialum often suffer physiological disorders that reduce animal performance. One solution is to replace endophyte-infected tall fescue pastures with an endophyte-free mixture. A benefit-cost analysis was conducted to determine the profitability of pasture restoration. The profitability of this action depends on the percentage of endophyte in existing pastures, the discount rate, stand life of the endophyte-free tall fescue variety, pasture stocking rates, product price, baseline calving rates, and the initial investment of replacement. In our benefit-cost analysis, assuming the stand life of endophyte-free tall fescue is 12 yr and the stocking rate is 1.20 head ha−1, we determined a critical infestation level of 74%. Thus, under these conditions pasture replacement should be profitable if, in the existing pastures, >74% of the fescue plants are infected with toxic endophyte. In sensitivity analyses, realistic variations in the discount rate, pasture stand life, stocking rate, product price, baseline calving rate, and initial investment of replacement generated new net present values and critical infestation levels. The most influential variable was the stocking rate. The critical infestation level decreased dramatically to 25% at a stocking rate of 4.0 head ha−1 and increased dramatically to 93% at a stocking rate of 0.82 head ha−1 Since infestation levels are often >70%, these results imply that for many livestock producers pasture replacement might be profitable compared with retaining endophyte-infected fescue stands.

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