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

Published online by Cambridge University Press:  26 January 2015

Brian R. Williams ,
Eric A. DeVuyst ,
Derrell S. Peel  and
Kellie Curry Raper
Brian R. Williams
Affiliation:
Department of Agricultural Economics, Mississippi State University, Mississippi State, Mississippi
Eric A. DeVuyst
Affiliation:
Department of Agricultural Economics, Oklahoma State University, Oklahoma City, Oklahoma
Derrell S. Peel
Affiliation:
Department of Agricultural Economics, Oklahoma State University, Oklahoma City, Oklahoma
Kellie Curry Raper
Affiliation:
Department of Agricultural Economics, Oklahoma State University, Oklahoma City, Oklahoma
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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.

Keywords

beef productionmatching pairsnonparametricvalue-added managementQ13Q16
Type
Research Article
Information
Journal of Agricultural and Applied Economics , Volume 46 , Issue 1 , February 2014 , pp. 125 - 138
Copyright
Copyright © Southern Agricultural Economics Association 2014

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