ABSTRACT
Summary Some parts of the humid tropics show great potential for intensive livestock production from forages. However, in many cases, economic analyses have not been performed. In this study technical and economic feasibility of three strategies for developing intensive pasture for beef production are evaluated. These strategies are fast development (no capital limitations) using commercial nitrogen (N), slow development using commercial N, and slow development using legumes as a N source. The strategies are based on experimental data and experience from the Orinoco Delta, Venezuela. Pastures of pangolagrass (Digitaria decumbens) and Swazi (D. swazilandensis) were rotationally grazed with unselected Criollo/Zebu cattle. Live-weight gains of 550 g/head/day and 1,000 kg/ha/yr were obtained. Using 1974 prices and a 30-year period, net annual cash flow (NACF), debt payback period (DPP), net present value (NPV), and annual profit after debt is paid are used to evaluate economic feasibility. Sensitivity analyses are performed by varying interest and discount rates, investment and operating costs, and livestock receipts. Under the alternative of fast pasture development with no capital constraints, NPV is highest and DPP is shortest. With slow pasture development using commercial N, NPV is negative and DPP is longest. NPV is positive with slow pasture development using legumes. NACF budgets indicate that receipts are greater than expenses earliest but accumulated debt is greatest with fast pasture development. All three strategies result in profitable farms once the developmental process is completed and the accumulated debt is paid. The farm in which legumes are substituted for commercial N is most profitable. However, the sensitivity analyses and other economic decision criteria indicate that this profitability must be interpreted cautiously. Development of intensive beef production in the Orinoco Delta is technically feasible. Most economic criteria used indicate that a developmental strategy with fast pasture development is most desirable. Slow pasture development using commercial N is least desirable and may not be economically feasible. The economic feasibility of all three strategies is very sensitive to changes in interest rate, discount rate, operating costs, and livestock receipts. Development of intensive beef production could be encouraged by government subsidization of capital or by government policies that result in favorable levels of operating costs or livestock receipts.
