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Open Cow Replacement Decisions: an Application of Asset Replacement Theory

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  • Ibendahl, Gregory A.
  • Anderson, John D.

Abstract

Beef producers must decide what to do with a cow that fails to conceive during the breeding season. Keeping the open cow results in a years expenses without any revenue. Replacing the open cow with a bred heifer provides immediate revenue although it will take a few years before the heifer reaches peak productivity. A net present value framework is employed to examine this decision. The problem is unique because the open cow and the replacement heifer have different life spans. Finding a common timeframe is impossible since both alternatives will eventually employ replacement heifers if a long enough time frame is considered.

Suggested Citation

  • Ibendahl, Gregory A. & Anderson, John D., 2001. "Open Cow Replacement Decisions: an Application of Asset Replacement Theory," 2001 Annual Meeting, July 8-11, 2001, Logan, Utah 36184, Western Agricultural Economics Association.
    • Handle: RePEc:ags:waealo:36184
    DOI: 10.22004/ag.econ.36184
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    References listed on IDEAS

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    1. R. K. Perrin, 1972. "Asset Replacement Principles," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 54(1), pages 60-67.
    2. Russell Tronstad & Russell Gum, 1994. "Cow Culling Decisions Adapted for Management with CART," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 76(2), pages 237-249.
    3. W. Marshall Frasier & George H. Pfeiffer, 1994. "Optimal Replacement and Management Policies for Beef Cows," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 76(4), pages 847-858.
    4. Ted C. Schroeder & Allen M. Featherstone, 1990. "Dynamic Marketing and Retention Decisions for Cow-Calf Producers," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 72(4), pages 1028-1040.
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    Cited by:

    1. Joe L. Parcell & Jason R.V. Franken & Maria Cox & David J. Patterson & Richard F. Randle, 2010. "Buyers’ perceptions of importance and willingness‐to‐pay for certain attributes of source and production verified bred heifers," Agricultural Economics, International Association of Agricultural Economists, vol. 41(5), pages 463-470, September.

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