Economics of mitigating greenhouse gas emissions from beef production in western Canada

Abstract

Beef production plays a vital role in the economy of western Canada; however, in the wake of global warming as a result of increasing greenhouse gas (GHG) emissions, the industry has come under some scrutiny. Although there has been encouraging scientific findings on mitigation strategies applicable to beef operations, there is a lack of economic analysis of such strategies. This study extends on the work of Beauchemin et al. (2011) and evaluates the economic impacts of greenhouse gas mitigation scenarios (GHGMS) for beef operations, and in the process identifies economic and environmental sustainable scenarios. A whole farm economic simulation model was developed and used to measure the profitability of eleven GHGMS adopted from Beauchemin et al. (2011). Whole farm present value gross margin of the eleven scenarios was measured and compared to the conversional system (baseline) of a farm in Vulcan County, Southern Alberta. The farm had 120 cows and their progeny, which was raised and finished on the farm for sale. The study farm was simulated over a period of 8 years in order to fully account for the lifetime economic activity of the breeding stock, as well as the progeny raised for sale. Simulation results estimated a whole farm present value gross margin per ha of $3.51 for the baseline. Seven of the eleven scenarios evaluated were found to increase profitability of the farm by up to 4%. However, only six of the scenarios were found to be both economically and environmentally sustainable to the farm. Four of the six sustainable scenarios were strategies applied to the breeding stock and two to the feedlot. These results suggest that beef producers can profitably implement several GHG mitigation strategies to their operations without substantial changing their operational system.