Effect of inter-annual variability in pasture growth and irrigation response on farm productivity and profitability based on biophysical and farm systems modelling.

Farm system and nutrient budget models are increasingly being used in analysis to inform on farm decision making and evaluate land use policy options at regional scales. These analyses are generally based on the use of average annual pasture yields. In New Zealand (NZ), like in many countries, there is considerable inter-annual variation in pasture growth rates, due to climate. In this study a modelling approach was used to (i) include inter-annual variability as an integral part of the analysis and (ii) test the approach in an economic analysis of irrigation in a case study within the Hawkes Bay Region of New Zealand. The Agricultural Production Systems Simulator (APSIM) was used to generate pasture dry matter yields (DMY) for 20 different years and under both dryland and irrigation. The generated DMY were linked to outputs from farm-scale modelling for both Sheep and Beef Systems (Farmaxx Pro) and Dairy Systems (Farmax® Dairy Pro) to calculate farm production over 20 different years. Variation in DMY and associated livestock production due to inter-annual variation in climate was large, with a coefficient of variations up to 20%. Irrigation decreased this inter-annual variation. On average irrigation, with unlimited available water, increased income by $831 to 1195/ha, but when irrigation was limited to 250mm/ha/year income only increased by $525 to 883/ha. Using pasture responses in individual years to capturing the inter-annual variation, rather than the pasture response averaged over 20years resulted in lower financial benefits. In the case study income from irrigation based on an average year were 10 to >20% higher compared with those obtained from individual years.