Valuing seasonal climate forecasts in the northern Australia beef industry

Cobon, D. H. and Darbyshire, R. and Crean, J. and Kodur, S. and Simpson, M. and Jarvis, C. (2019) Valuing seasonal climate forecasts in the northern Australia beef industry. Weather, Climate and Society. ISSN 1948-8327

Abstract

Seasonal climate forecasts (SCFs) provide opportunities for pastoralists to align production decisions to climatic conditions, as SCFs offer economic value by increasing certainty about future climatic states at decision-making time. Insufficient evidence about the economic value of SCFs was identified as a major factor limiting adoption of SCFs in Australia and abroad. This study examines the value of SCFs to beef production system management in northern Australia by adopting a theoretical probabilistic climate forecast system. Stocking rate decisions in October, before the onset of the wet season, were identified by industry as a key climate sensitive decision. The analysis considered SCF value across economic drivers (steer price in October) and environmental drivers (October pasture availability). A range in forecast value was found (0-$14/head) dependent on pasture availability, beef price and SCF skill. Skilful forecasts of future climate conditions offered little value with medium or high pasture availability, as in these circumstances, pastures were rarely over-utilised. In contrast, low pasture availability provided conditions for alternative optimal stocking rates and for SCFs to be valuable. Optimal stocking rates under low pasture availability varied the most with climate state (i.e. wet or dry), indicating that producers have more to gain from a skilful SCF at these times. Although the level of pasture availability in October was the major determinant of stocking rate decisions, beef price settings were also found to be important. This analysis provides insights into the potential value of SCFs to extensive beef enterprises and can be used by pastoralists to evaluate the cost-benefit of using a SCF in annual management.


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Item Type: Article (Commonwealth Reporting Category C)
Refereed: Yes
Item Status: Live Archive
Additional Information: © 2019 American Meteorological Society. Published online 11 September 2019. Permanent restricted access to Publisher's Accepted Version, in accordance with the copyright policy of the publisher.
Faculty/School / Institute/Centre: Current - Institute for Life Sciences and the Environment - Centre for Applied Climate Sciences (1 Aug 2018 -)
Faculty/School / Institute/Centre: Current - Institute for Life Sciences and the Environment - Centre for Applied Climate Sciences (1 Aug 2018 -)
Date Deposited: 01 Nov 2019 08:18
Last Modified: 20 Nov 2019 05:37
Uncontrolled Keywords: cattle production, pasture growth, GRASP model
Fields of Research : 14 Economics > 1402 Applied Economics > 140201 Agricultural Economics
05 Environmental Sciences > 0502 Environmental Science and Management > 050209 Natural Resource Management
01 Mathematical Sciences > 0103 Numerical and Computational Mathematics > 010303 Optimisation
Identification Number or DOI: 10.1175/WCAS-D-19-0018.1
URI: http://eprints.usq.edu.au/id/eprint/37276

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