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Price Signals as Indicators of Profitability at Various Stages of Production in Oklahoma Beef

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  • Williams, Brian R.
  • DeVuyst, Eric A.

Abstract

Cow-calf producers face an annual decision on when to sell their calves. They can sell them at any point between weaning and slaughter, with the objective of finding the profit maximizing selling point. This paper investigates the use of price signals to determine profit maximizing selling points/retention strategies. Three retention strategies, one for fall calving and two for spring calving, are considered. Producers can sell their calves at weaning, after preconditioning, after grass pasture, after wheat pasture, or after the feedlot depending on the retention strategy. These price signals indicate the optimal selling point based on an observable price ratio at weaning. This paper also considers factors such as the level of preconditioning premiums and the length of the preconditioning period required to impact the profit maximizing selling point.

Suggested Citation

  • Williams, Brian R. & DeVuyst, Eric A., 2011. "Price Signals as Indicators of Profitability at Various Stages of Production in Oklahoma Beef," 2011 Annual Meeting, February 5-8, 2011, Corpus Christi, Texas 98769, Southern Agricultural Economics Association.
    • Handle: RePEc:ags:saea11:98769
    DOI: 10.22004/ag.econ.98769
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    References listed on IDEAS

    as
    1. Van Tassell, Larry W. & McNeley, Scott M. & MacNeil, Michael D. & Short, Robert E. & Grings, Elaine E., 1997. "Retained Ownership of Beef Cattle When Considering Production and Price Risk," 1997 Annual Meeting, July 13-16, 1997, Reno\ Sparks, Nevada 35876, Western Agricultural Economics Association.
    2. Williams, Ed & Farris, Donald E., 1971. "Feed/Cattle Price Relationships And The Optimum System And Location Of Cattle Feeding In Texas," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 3(1), pages 1-10, December.
    3. Ward, Clement E. & Lalman, David L., 2003. "Price Premiums From A Certified Feeder Calf Preconditioning Program," 2003 Conference, April 21-22, 2003, St. Louis, Missouri 18973, NCR-134 Conference on Applied Commodity Price Analysis, Forecasting, and Market Risk Management.
    Full references (including those not matched with items on IDEAS)

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    Keywords

    Farm Management; Livestock Production/Industries; Production Economics;
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