https://search.dev.ndltd.org/etd/massey/oai:mro.massey.ac.nz:10179/8362
type: CreativeWork
name: Risk-return analysis of high performing organic and conventional meat production systems : a thesis presented in partial fulfilment of the requirements for the degree of Master of Applied Science in Agricultural Systems and Management at Massey University
description: Demand for organic meat is growing rapidly and so is the interest of New Zealand farmers in producing it. However, information on the advantages of such a system is limited. Studies that have evaluated organic farming systems were either carried out overseas under different conditions or were solely based on comparisons of before versus after the conversion to organic farming, instead of organic versus alternative investment options. The present study examines the economic viability of options available to commercial meat producers of high performance organic systems and a high performance conventional farming system in New Zealand. This involved a robust analysis evaluating the risk-return profiles of strategic enterprise changes and linking these to the risk-preferences of the managers. The Stockpol® model was used to simulate the biological feasibility and undertake a preliminary economic assessment of the alternatives: (i) Full organic and (ii) Intensive beef cattle and lamb finishing systems. A spreadsheet (Excel®) model was developed to undertake a full economic and risk analysis (@Risk®) of those options. Both the full organic and intensive conventional options had a greater chance of achieving long-term target sustainable business growth (SBG) for both case study farms than their base systems (status quo). Continuation of the base system had lower net operating profit after tax (NOPAT) for both case study farms and a lower probability of achieving acceptable levels of business growth. On Case Farm One, the NOPAT mean of the conventional was higher and exhibited greater variation than the full organic alternative. On Case Farm Two, the NOPAT mean of the full organic was also slightly lower than the conventional option but both options exhibited a very similar risk-return profile. The sensitivity regression analysis revealed for both farmers that market uncertainty had the greatest impact on NOPAT mean variability followed by premium price for organic farms, t…
abstract: Demand for organic meat is growing rapidly and so is the interest of New Zealand farmers in producing it. However, information on the advantages of such a system is limited. Studies that have evaluated organic farming systems were either carried out overseas under different conditions or were solely based on comparisons of before versus after the conversion to organic farming, instead of organic versus alternative investment options. The present study examines the economic viability of options available to commercial meat producers of high performance organic systems and a high performance conventional farming system in New Zealand. This involved a robust analysis evaluating the risk-return profiles of strategic enterprise changes and linking these to the risk-preferences of the managers. The Stockpol® model was used to simulate the biological feasibility and undertake a preliminary economic assessment of the alternatives: (i) Full organic and (ii) Intensive beef cattle and lamb finishing systems. A spreadsheet (Excel®) model was developed to undertake a full economic and risk analysis (@Risk®) of those options. Both the full organic and intensive conventional options had a greater chance of achieving long-term target sustainable business growth (SBG) for both case study farms than their base systems (status quo). Continuation of the base system had lower net operating profit after tax (NOPAT) for both case study farms and a lower probability of achieving acceptable levels of business growth. On Case Farm One, the NOPAT mean of the conventional was higher and exhibited greater variation than the full organic alternative. On Case Farm Two, the NOPAT mean of the full organic was also slightly lower than the conventional option but both options exhibited a very similar risk-return profile. The sensitivity regression analysis revealed for both farmers that market uncertainty had the greatest impact on NOPAT mean variability followed by premium price for organic farms, t…
author: Beheregaray Neto, Vasco
keywords: New Zealand, Meat industry and trade, Organic farming, Economic aspects
date published: 2001
date modified: 2026-07-27T20:17:21Z
provider: Massey University
publisher: Networked Digital Library of Theses and Dissertations
type: WebPage
source organization: Massey University