Hostname: page-component-78c5997874-v9fdk Total loading time: 0 Render date: 2024-11-10T20:13:17.207Z Has data issue: false hasContentIssue false
  • English
  • Français

Economics of Purchasing Genetically Superior Beef Bulls

Published online by Cambridge University Press:  05 September 2016

G. M. Clary ,
J. W. Jordan  and
C. E. Thompson
G. M. Clary
Affiliation:
Department of Agricultural Economics and Rural Sociology, Clemson University
J. W. Jordan
Affiliation:
Department of Agricultural Economics and Rural Sociology, Clemson University
C. E. Thompson
Affiliation:
Department of Animal Science, Clemson University
Get access Rights & Permissions [Opens in a new window]

Abstract

Net present value analysis is used to derive the marginal bid price for a beef herd sire from after-tax net revenues and cash flow influenced by genetic improvements. Marginal bid price represents the additional amount a producer could pay, above the present value of the current beef herd sire, for a sire expected to exhibit superior performance as reflected by increased average weaning weights of offspring.

An analysis of the profitability of purchasing a breeding bull for a commercial beef cow herd is presented as an application. Several alternative scenarios illustrate the impact of selected determinants on the marginal bid price of a bull.

Keywords

beef bullsgenetic progressafter-tax returnbid price
Type
Articles
Information
Journal of Agricultural and Applied Economics , Volume 16 , Issue 2 , December 1984 , pp. 31 - 36
Copyright
Copyright © Southern Agricultural Economics Association 1984

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Bentley, E., Waters, J. R., and Shumway, C. R. “Determining Optimal Replacement Age of Beef Cows in the Presence of Stochastic Elements.” So. J. Agr. Econ., 8(1976):13–18.Google Scholar
Chisholm, A. H.“Criteria for Determining the Optimum Replacement Pattern.” J. Farm Econ., 48(1966):107–112.Google Scholar
Dillon, J. L. The Analysis of Response in Crop and Livestock Production, 2nd ed., New York: Pergamon Press, 1977.Google Scholar
Faris, J. E.“Analytical Techniques Used in Determining the Optimum Replacement Pattern.” J. Farm Econ., 42(1960):755–766.Google Scholar
Kaiser, E. H.“A Profitability and Cash Flow Analysis of Farm Land Investment.” South Carolina Agr. Exp. Sta. Bull. 627; Clemson University, September, 1981.Google Scholar
Kay, R. D. Farm Management, 1st ed., New York: McGraw-Hill Book Co., 1981.Google Scholar
Kay, R. D. and Rister, E.. “Income Tax Effects on Beef Cow Replacement Strategy.” So. J. Agr. Econ., 9(1977):169–172.Google Scholar
Lasley, J. F. Beef Cattle Production, 1st ed., New Jersey: Prentice-Hall Inc., 1981.Google Scholar
Melton, B. E.“Economics of Beef Cow Culling and Replacement Decisions Under Genetic Progress.” W.J. Agr. Econ., 5(1980):137–147.Google Scholar
Penson, J. B. Jr, Klinefelter, D. A., and Lins, D. A. Farm Investment and Financial Analysis, 1st ed., New Jersey: Prentice-Hall Inc., 1982.Google Scholar
Perrin, R. K.“Asset Replacement Principles.” Amer. J. Agr. Econ., 54(1972):60–67.Google Scholar
Rister, E. “Capital Gains Tax Treatment and the Cattleman.” Unpublished M.S. thesis, Texas A&M University, 1976.Google Scholar
Rogers, L. F.“Economics of Replacement Rates in Commercial Beef Herds.” J. Animal Sci., 34(1972):921–925.Google Scholar
Winder, J. W. L. and Trant, G. I. “Comments on Determining the Optimum Replacement Pattern.” J. Farm Econ., 43(1961):939–951.Google Scholar