Author: Marnie Griffith
A new era of water scarcity has changed past patterns of feeding dairy cows in northern Victoria. This paper derives a model for estimating
least-cost feeding of dairy cows under a range of assumptions regarding prices for irrigation water, hay and feed grain. The cost-minimisation is
subject to a variety of nutritional constraints, including seasonal provision of energy, fibre and protein.
It is found that the optimal feeding regime varies considerable with input prices, from an irrigated pasture-based system to a diet based much
more on bought-in hay and feed grain. This change broadly mimics that which has taken place in the region over the current extended period of
drought.
Output from the linear programming model is used to estimate the CES substitution parameter between water and the other inputs. This parameter is
estimated at 0.7, significantly higher than the 0.2 originally used.
JEL classification: C61; Q15; Q25.
Keywords: .
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