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Production Inefficiency in Fed Cattle Marketing and the Value of Sorting Pens into Alternative Marketing Groups Using Ultrasound Technology

Published online by Cambridge University Press:  26 January 2015

Stephen R. Koontz ,
Dana L. Hoag ,
John R. Brethour  and
Jodine Walker
Stephen R. Koontz
Affiliation:
Department of Agricultural and Resource Economics, Colorado State University, Fort Collins, CO
Dana L. Hoag
Affiliation:
Department of Agricultural and Resource Economics, Colorado State University, Fort Collins, CO
John R. Brethour
Affiliation:
Department of Animal Science and Industry, Kansas State University, Hayes Agricultural Research Center, Hayes, KS
Jodine Walker
Affiliation:
Department of Agricultural and Resource Economics, Colorado State University, Fort Collins, CO
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Abstract

The cattle industry batch markets animals in pens. Because of this, animals within any one pen can be both underfed and overfed. Thus, there is a production inefficiency associated with batch marketing. We simulate the value of sorting animals through weight and ultrasound measurements from original pens into smaller alternative marketing groups. Sorting exploits the production inefficiency and enables cattle feeding enterprises to avoid meat quality discounts, capture premiums, more efficiently use feed resources, and increase returns. The value of sorting is between $15 and $25 per head, with declining marginal returns as the number of sort groups increases.

Keywords

cattle feedingproduction efficiencysimulationsortingvalue-based marketingultrasoundC15D21D23Q12
Type
Research Article
Information
Journal of Agricultural and Applied Economics , Volume 40 , Issue 3 , December 2008 , pp. 895 - 912
Copyright
Copyright © Southern Agricultural Economics Association 2008

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