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RISK REDUCTION THROUGH OPTIMAL GRAZING SCENARIOS FOR
LIVESTOCK/FORAGE SYSTEMS IN TEXAS PANHANDLE
that risk might be reduced by adoption of both winter and summer grazing
strategies. Means, σ, and COV for NRV are shown in Table 3 for High,
Normal and Low annual precipitation scenarios. Variation in NRV is
evident. Winter grazing (WH) is notably less risky during High or Normal
production years compared to summer grazing strategies (SS or BS). The
COV for WH (0.2162) is about half of that for SS (0.3791) and BS (0.3949)
under the High scenario. Winter grazing presents similar risk advantages
under Normal conditions, as COV for BS (0.5555) and SS (0.4854) are about
twice that of WH (0.2702). The scenario with Low annual precipitation is
the most unfavorable for winter grazing in terms of relative risk to NRV. The
COV for WH during a Low year is 1.9735, about double that of SS (0.9021),
and more than triple the COV of 0.6130 for RG. The relative risk for WH is
notably higher during the Low year than in Normal or High scenarios.
Production costs are added to the NRV in order to determine the
expected net return to land, labor and management (NR) for each scenario. In
addition, seasonal precipitation distributions correspond to grazing times for
each scenario. Results in Table 4 therefore reflect the combined price and
precipitation risk associated with the period of grazing for each scenario. The
lowest risk alternative is for WH, with the combined price and precipitation
risk indicated by the COV of 0.2162. Combined risk for the other
alternatives is notably higher, as indicated by COV of 0.3791, 0.3949, and
0.3369 for SS, BS, and RG, respectively.
Conclusions
Declining irrigation in the Texas Panhandle continues to encourage
development of dryland production systems. Individual producers are often
limited by land ownership patterns and constraints specific to their situation,
thus may benefit from models that estimate optimum alternatives based on
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