On-farm weather risk management in suckler cow farms: A recursive discrete stochastic programming approach

Currently France wants to introduce a weather risk management framework intoits agricultural policy for livestock farming. The aim of this paper is to better understand howon-farm risk reducing strategies modify the production system and profit distribution ofFrench suckler cow enterprises. We present in this paper an original bioeconomic model thattakes into account both risk anticipation and risk adjustments and that details biotechnicalrelationships between the different components of the beef cattle production system and theirdynamics. On-farm risk management strategies are endogeneized under weather uncertaintyand tested on real observed weather sequences. We simulate four scenarios characterized bydifferent risk aversions and feed prices. Results emphasized that production adjustments,particularly the adjustments of area of grassland harvested and the possibility to purchasesubstitutes to on-farm forage production, improve farmers profit under weather variability.However, limiting the amplitude of these adjustments helps decreasing profit variability. Allsimulated long term decisions associated to risk reducing strategies encompass a reduction oflong term stocking rate and the constitution of feed stocks. The impact of hay feed price on themarket has similar effects on the long term strategy.