Economic Analysis of Backgrounding Calves

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Economic Analysis of Backgrounding Calves, Is A Well-Researched Topic, It Is To Be Used As A Guide Or Framework For Your Research.

Introduction

For many beef producers, the 2020 calving season started with anxiety and uncertainty, looking forward to the fall cattle markets. (Scott Brown, Farm Progress 2020) This year has already seen some interesting changes that have never previously been observed. With these changes come crucial strategic management decisions that beef producers must implement to keep their operations afloat. Utah producers affected by swings in market price due to COVID-19 may be wondering what do to with their calf crop in the fall of 2020. Backgrounding calves is becoming a more common trend with U.S. beef producers as a strategy to protect their bottom line by waiting out fall price variability, hoping for better spring prices on backgrounded calves. Many producers may also consider backgrounding calves with the intent to receive premiums from value added programs. However, before jumping into backgrounding calves, producers should first assess their summer and fall forage situations as well as determine whether they have the resources, finances, and infrastructure available to keep calves gaining weight through the winter. (Livestock Marketing Information Center, Beef Magazine)

The purpose of this thesis is to allow beef producers a better insight into the costs and benefits associated with carrying over fall calves to yearling weight and selling them the following spring. Producers are usually seen as risk-averse when it comes to selling their livestock. (Feuz, Fausti 1995) Cattle producers face several decisions during the year when it comes to calf input costs and the premium to be received for fall calves, with the final decision coming at the last minute, when making the decision to keep or sell calves. Said calves might be sold in the fall or retained through the winter and marketed in the springtime of the year following for a potential premium when the cattle markets tend to rise in February-April. Animals that are retained through the winter have costs associate, which must be considered prior to the decision to retain the calves. Calf retention may allow the producer better control of profitability due to the flexibility added in responding to the market price. When calf prices are high, or feed input costs prohibit carryover, the producer can sell as they conventionally would have in the fall markets. Alternative options for marketing are also something to consider when it comes time to sell calves in both fall and spring markets. New forms of digital marketing and sales may offer some benefits for producers as they consider how to sell their calves and what their time is worth.

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YourPastQuestions Brand

Additional information

Author

Jayden Gunnell

No of Pages

30

Reference

YES

Format

PDF

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