Combining Biophysical And Price Simulations To Assess The Economics Of Long-term Crop Rotations

Biophysical simulation models (e.g. APSIM) using historical rainfall data are increasingly being used to provide yield and other data on crop rotations in various regions of Australia. However, to analyse the economics of these rotations it is desirable to incorporate the other main driver of profitability, price variation. Because the context was that APSIM was being used to simulate an existing trial site being monitored by a farmer group Gross Margin output was considered most appropriate. Long-run rotational gross margins were calculated for the various rotations with yields (and other physical outputs) derived from APSIM simulations over a period of 100+ years and prices simulated in @Risk based on subjective triangular price distributions elicited from farmers in the group. Rotations included chickpeas, cotton, lucerne, sorghum, wheat and different lengths of fallow. Output presented to the farmers included mean annual gross margins and distributions of gross margins presented as probability distributions, cumulative probability distributions and box and whisker plots. Cotton rotations were the most profitable but had greater declines in soil fertility and greater drainage out of the root zone.