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The Likelihood of Positive Returns from Value-Added Calf Management Practices

Author

Listed:
  • Williams, Brian R.
  • DeVuyst, Eric A.
  • Peel, Derrell S.
  • Raper, Kellie Curry

Abstract

Extension faculty have been educating cow-calf producers about value-added calf management programs and the premiums available at auction from these management practices for years. Despite these efforts, producers express doubt regarding the likelihood of premiums and the profitability of value-added management practices. We use matching pairs to calculate the difference in premiums and net returns between adopters and nonadopters and calculate the likelihood of positive net returns (and premiums) for individual practices and practice bundles. The probability of positive net returns ranges from 57% for dehorning to 79% for a certified vac-45 program (calves certified by a third party to be preconditioned for a minimum of 45 days, vaccinated, and dehorned) and probabilities increase with more practices adopted.

Suggested Citation

  • Williams, Brian R. & DeVuyst, Eric A. & Peel, Derrell S. & Raper, Kellie Curry, 2014. "The Likelihood of Positive Returns from Value-Added Calf Management Practices," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 46(1), pages 125-138, February.
  • Handle: RePEc:cup:jagaec:v:46:y:2014:i:01:p:125-138_00
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    References listed on IDEAS

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    1. Pope, Kelsey Frasier & Schroeder, Ted C. & Langemeier, Michael R. & Herbel, Kevin L., 2011. "Cow-Calf Producer Risk Preference Impacts on Retained Ownership Strategies," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 43(4), pages 497-513, November.
    2. Williams, Galen S. & Raper, Kellie Curry & DeVuyst, Eric A. & Peel, Derrell S. & McKinney, Doug, 2012. "Determinants of Price Differentials in Oklahoma Value-Added Feeder Cattle Auctions," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 37(1), pages 1-14, April.
    3. Bulut, Harun & Lawrence, John D., 2007. "The Value of Third-Party Certification of Preconditioning Claims at Iowa Feeder Cattle Auctions," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 39(3), pages 625-640, December.
    4. Dhuyvetter, Kevin C., 2004. "Preconditioning Beef Calves: Are Expected Premiums Sufficient To Justify The Practice?," 2004 Annual Meeting, June 30-July 2, 2004, Honolulu, Hawaii 36196, Western Agricultural Economics Association.
    5. David C. Hall & Thomas O. Knight & Keith H. Coble & Alan E. Baquet & George F. Patrick, 2003. "Analysis of Beef Producers' Risk Management Perceptions and Desire for Further Risk Management Education," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 25(2), pages 430-448.
    6. Williams, Brian R. & Raper, Kellie Curry & DeVuyst, Eric A. & Peel, Derrell S. & Lalman, David L. & Richards, Chris & Doye, Damona G., 2012. "Demographic Factors Affecting the Adoption of Multiple Value-Added Practices by Oklahoma Cow-Calf Producers," 2012 Annual Meeting, February 4-7, 2012, Birmingham, Alabama 119743, Southern Agricultural Economics Association.
    7. Zimmerman, Lance C. & Schroeder, Ted C. & Dhuyvetter, Kevin C. & Olson, K.C. & Stokka, Gerald L. & Seeger, Jon T. & Grotelueschen, Dale M., 2012. "The Effect of Value-Added Management on Calf Prices at Superior Livestock Auction Video Markets," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 37(1), pages 1-16, April.
    8. Gillespie, Jeffrey M. & Nehring, Richard F., 2012. "The Economics of Organic Versus Conventional Cow-calf Production," 2012 Annual Meeting, February 4-7, 2012, Birmingham, Alabama 119773, Southern Agricultural Economics Association.
    9. Fausti, Scott W. & Gillespie, Jeffrey M., 2006. "Measuring risk attitude of agricultural producers using a mail survey: how consistent are the methods?," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 50(2), pages 1-18, June.
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    Cited by:

    1. Schulz, Lee L. & Dhuyvetter, Kevin C. & Doran, Beth, 2014. "Factors Affecting Preconditioned Calf Price Differentials: How much do Market and Sale Conditions Matter?," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 170570, Agricultural and Applied Economics Association.
    2. Schulz, Lee L. & Dhuyvetter, Kevin C. & Doran, Beth E., 2015. "Factors Affecting Preconditioned Calf Price Premiums: Does Potential Buyer Competition and Seller Reputation Matter?," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 40(2), pages 1-22, May.

    More about this item

    JEL classification:

    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness
    • Q16 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - R&D; Agricultural Technology; Biofuels; Agricultural Extension Services

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