Rodney D. Jones

The Impact of Forward Contracting on Fed Cattle Transaction Prices

Beef packers have vertically integrated into the cattle feeding sector. This study examines the impacts of beef packer forward contracting on cash cattle transaction prices in southwest Kansas. From late May through November 1990, average fed cattle cash transaction prices were estimated to be

The Impacts of Quality on Cash Fed Cattle Prices

0.15/cwt to

Market Power and the Cattle Cycle

0.31/cwt lower as a result of forward contract cattle shipments. The impact of the level of forward contracting on cash prices was variable across time: cash prices were as much as

Economic risk analysis model for bovine viral diarrhea virus biosecurity in cow-calf herds.

0.34/cwt lower at times when contract shipments were large, and prices were statistically unaffected at times when forward contract shipments were low.

Estimating the Economic Value of Specific Characteristics Associated with Angus Bulls Sold at Auction

Quality factors affecting fed cattle prices were examined during a six-month period in southwestern Kansas. Transaction prices were significantly affected by the percentage of cattle expected to grade choice times the choice-to-select carcass price spread, finish uniformity, average weight, dressing percentage, breed, number of cattle purchased by a single packer on a given day, the packer, the feedyard, the day-of-the-week the cattle were sold, and the number of bids received. Asking prices were significantly affected by many of the same factors. Asking and transaction prices reflected approximately 25 percent of the packer value differentials for expected carcass quality grades.

Examining death loss in Kansas feedlots

The relationship between the dynamic cattle cycle and the potential for market power in cattle purchases has rarely been studied. This paper provides a conceptual framework showing how the cattle cycle and buyer market power are related. Not only does a larger cattle stock lead to a lower fed cattle price, but the cattle stocks negative effect on price is magnified by the degree of buyer market power in cattle procurement. Empirical findings support the posited theoretical relationships and help explain why previous researchers reached different conclusions regarding the extent of market power in the industry. Copyright 2010, Oxford University Press.

A Stochastic Model to Compare Breeding System Costs for Synchronization of Estrus and Artificial Insemination to Natural Service

A stochastic model was designed to calculate the cost-effectiveness of biosecurity strategies for bovine viral diarrhea virus (BVDV) in cow-calf herds. Possible sources of BVDV introduction considered were imported animals, including the calves of pregnant imports, and fenceline contact with infected herds, including stocker cattle raised in adjacent pastures. Spread of BVDV through the herd was modeled with a stochastic SIR model. Financial consequences of BVDV, including lost income, treatment costs, and the cost of biosecurity strategies, were calculated for 10 years, based on the risks of a herd with a user-defined import profile. Results indicate that importing pregnant animals and stockers increased the financial risk of BVDV. Strategic testing in combination with vaccination most decreased the risk of high-cost outbreaks in most herds. The choice of a biosecurity strategy was specific to the risks of a particular herd.

Economic values associated with expected progeny differences (EPD) for angus bulls at auction

The genetic traits of a purebred bull convey the reproductive and economic value to buyers. This study examines and compares the value of actual production weights (birth, weaning, and yearling weight), production expected progeny differences (EPDs) (birth, weaning, milk, and yearling), and ultrasound EPDs (carcass quality predictors) for purebred Angus bulls sold at auction. One EPD, birth weight, was valued by buyers more than its corresponding actual weight, though both actual weights and EPDs significantly impact price. Predictors of carcass quality were important in determining price. Finally, several individual animal factors and sale characteristics were significant in determining price.

Measuring Improvements in Performance of Steers and Heifers During Finishing Phases

This study had three primary objectives: 1) to determine if there is an annual and/or seasonal trend in percentage of death loss in Kansas feedlots; 2) to examine the difference in death loss between steers and heifers; and 3) to evaluate if “in” weight has had an effect on percentage of death loss in Kansas feedlots. The annual trend in death loss for both steers and heifers was found to be significant and positive, indicating that death loss has been increasing over the sample period. Seasonal increases in death loss were significant for early-spring closeouts for both steers and heifers. The annual trend in the difference between the death loss for steers and heifers, though not significant, was negative. There were, however, certain closeout months in which there were significant differences in the death loss of steers relative to heifers. Placement weight had a significant negative impact on death loss in heifer finishing, but no significant impact on steer finishing. Our regression analysis indicates that death loss has been increasing over the sample period, that certain closeout months tend to impact steer and heifer death loss differently, and that placement weight in heifers has had a significant impact on percentage of death loss in cattle.

Modeling the impact of distance between offices and borrowers on agricultural loan volume

Abstract A stochastic model was used to compare costs of natural-service breeding with several synchronization of estrus and AI systems and to identify important factors in determining the differences in expected economic returns between systems. Three herd sizes, 3 cow-to-bull ratios, and 7 systems for synchronization of estrus were examined. Stochastic variables in the model included bull purchase price, percent calf crop, calf price, AI conception rate, cull bull value, cull bull weight, genetic value premium of AI-sired calf, heat detection rate, season pregnancy rate, semen cost, and synchronized calf weight advantage. The AI systems were more cost effective at lower cow-to-bull ratios. Compared with natural service, heat detection and cleanup fixed-time AI synchronization systems were economically preferred 33% of the time, 41% for strict fixed-time AI, and 49% for heat detection only systems. Heat detection only systems in large herds using low cow-to-bull ratios demonstrated a net economic advantage relative to natural service 85% of the time. Genetic value premiums and semen cost were consistently included in the top 3 factors that determined expected economic differences between natural service and AI systems across herd sizes and cow-to-bull ratios. Variability in bull purchase price was the most important factor when the cow-to-bull ratio was low. Estrus synchronization and AI were economically advantageous compared with natural service when a sufficient genetic value premium could be obtained from AI-sired calves.