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Economic analysis of profitability factors in cattle feeding: modeling optimal feeding to achieve maximum profitability




Larsen, Reed C., author
Koontz, Stephen, advisor
Pendell, Dustin, advisor
Wagner, John, committee member

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Past research indicates that the profitability of a feedlot can be determined by both production and economic factors. This study seeks to evaluate specific production and economic factors in order to deduce which of these factors has the greatest impact on profitability. This study uses economic and production data from feedlots located in the West, Midwest, and Southwest United States. Results of this study indicate that economic factors such as cattle prices and feed costs have the greatest effect on profitability. It was also found that production variables including dry matter intake, dry matter conversion, average daily gain, days on feed, percent of pen that grade quality Prime and Choice, and percent of pen that are dark cutters have a large impact on the variation of profit. Using these factors, production functions were created to determine optimal days on feed and optimal out-weights to maximize profitability. These production functions indicated that as prices increased for corn and feeder cattle, profit decreased and feedlot managers should feed fewer days to minimize profit losses. As the price of fed cattle increased, the results suggest that feedlot managers should feed cattle longer to maximize profit.


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production function
cattle feeding


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