Replacement Alternatives for Beef Cow Herds: An Analysis of Retaining Non-pregnant Cows

Authors

Trenton T. Bohling, University of Nebraska-LincolnFollow

First Advisor

Darrell R. Mark

Date of this Version

5-2011

Document Type

Thesis

Citation

A thesis presented to the faculty of the Graduate College at the University of Nebraska in partial fulfillment of requirements for the degree of Master of Science

Major: Agricultural Economics

Under the supervision of Professor Darrell R. Mark

Lincoln, Nebraska, May 2011

Comments

Copyright 2011, Trenton Bohling

Abstract

A non-pregnant cow is a liability to a producer. Over the last four years, cow-calf producers have had an increased number of non-pregnant cows due to factors like environmental conditions and diseases like trichomoniasis. While most research has indicated that culling a non-pregnant female and replacing the cow with retained heifers, purchased heifers, or purchased cows are the only economic alternatives, recent trends in the cattle market have suggested that keeping a non-pregnant cow may also be an alternative.

Annual beef cow budgets were created based on typical Nebraska Sandhills conditions. Revenues and costs in these budgets vary according to different classes and age of cattle and replacement strategy. Cash flows are then projected for five years to compare the replacement alternatives. Five-year averages from 2006-2010, as well as an additional analysis that used Winter 2010/2011 prices, were used to determine the cash flow values.

The Total 5-year Discounted Cash Flow values showed unprofitable levels in the cow-calf industry based on five-year averages whereas the Winter 2010/2011 price data resulted in profits. Based on the Total 5-year Discounted Cash Flow values using five-year averages, the replacement alternative of purchasing cows surfaced as the highest return. Retaining heifers was the highest return replacement alternative when Winter 2011 prices were used. Keeping the non-pregnant cow alternative did not prove to be the highest return alternative in either price data used. However, it was not the lowest return either.

Different replacement alternatives become attractive at different cull cow values. Lower cull cow values created higher cash flow values when keeping a non-pregnant cow, whereas extremely valuable cull cows negated this alternative. Furthermore, Winter 2011 prices suggested that keeping a non-pregnant cow was a more feasible alternative than that of purchasing a bred heifer.

Advisor: Darrell R. Mark