Economic Analysis of Backgrounding Calves

Author

Jayden Gunnell, Utah State UniversityFollow

Date of Award

12-2020

Degree Type

Report

Degree Name

Master of Science (MS)

Department

Applied Economics

Committee Chair(s)

Ryan Larsen

Committee

Ryan Larsen

Committee

Matthew Garcia

Committee

Dillon Feuz

Abstract

The purpose of this thesis is to allow beef producers a better insight into the costs and benefits associated with carrying over fall calves to yearling weight and selling them the following spring. Producers are usually seen as risk-averse when it comes to selling their livestock. (Feuz, Fausti 1995) Cattle producers face several decisions during the year when it comes to calf input costs and the premium to be received for fall calves, with the final decision coming at the last minute, when making the decision to keep or sell calves. Said calves might be sold in the fall or retained through the winter and marketed in the springtime of the year following for a potential premium when the cattle markets tend to rise in February-April. Animals that are retained through the winter have costs associate, which must be considered prior to the decision to retain the calves. Calf retention may allow the producer better control of profitability due to the flexibility added in responding to the market price. When calf prices are high, or feed input costs prohibit carryover, the producer can sell as they conventionally would have in the fall markets. Alternative options for marketing are also something to consider when it comes time to sell calves in both fall and spring markets. New forms of digital marketing and sales may offer some benefits for producers as they consider how to sell their calves and what their time is worth. The goal of this paper is to provide producers a more extensive insight into the risk and budgeting constraints associated with backgrounding calves by using historical price data and enterprise budgets to help producers make informed decisions in their operations and assist in management decisions.

Recommended Citation

Gunnell, Jayden, "Economic Analysis of Backgrounding Calves" (2020). All Graduate Plan B and other Reports, Spring 1920 to Spring 2023. 1490.
https://digitalcommons.usu.edu/gradreports/1490