Are Beef Cattle Grown on Contract Quizlet

Beef cattle producers face many challenges, including changes in weather, input prices, animal performance, technology, and marketing opportunities. These challenges require that producers make informed, sound business decisions. Collecting and analyzing production and financial records are essential to making management decisions that will improve the efficiency and profitability of the beef herd in today's challenging beef industry.

For more information and resources that are not contained here, or to reach out about other questions about your operation please contact Department of Agricultural & Resource Economics

Information and Resources

Farm Financial Statements

An Introduction to Basic Farm Financial Statements: Income Statement
The purpose of this publication is to provide an introduction to farm income statements and demonstrate how income statements can be used by producers to assist agricultural decision makers. Regardless of farm size, enterprises, resources and ownership goals, it is important for decision makers to understand the information in income statements and how to build cash or accrual income statements for their business.

An Introduction to Basic Farm Financial Statements: Balance Sheet
The goal of this publication is to introduce balance sheets. A balance sheet is a financial statement that shows a detailed list of all assets, liabilities and the owner's equity position of the farming operation at a specific point in time. This publication provides an overview of the three principal components of a balance sheet: 1) assets; 2) liabilities; and 3) owner's equity. It also discusses important farm financial measures that can be derived and analyzed from the balance sheet.

Production and Management

Cattle Businesses: Which One is Right for Me?
There are many sectors of the cattle business including commercial cow-calf, stocker cattle, backgrounding, finishing, seedstock, heifer development and stocker cows. The many different sectors of the cattle business form an elaborate system with various marketing decisions and opportunities. The elaborate cattle production system coupled with beef marketing results in another layer of complexity. Given the breadth of knowledge necessary to grow and develop an animal through the entire production cycle from birth to harvest, many cattle producers choose to focus on a smaller portion of the full cycle, which leads to the familiar question of which sector of the business is the best fit for a specific producer.

Replacing Late-Calving Beef Cows to Shorten Calving Season
We simulated beef cattle producers' returns to shortening a 120-day calving season to 45 and 60 days by replacing late-calving cows for two herd sizes. We developed dynamic simulation models to consider production and price risk. We explored outcomes from annually replacing 10% or 20% of the late-calving cows to reach the desired calving-season length. The optimal scenario depends on herd size and whether the producer wants to maximize profits or certainty equivalent. The smaller herd benefited more from shortening calving season relative to the large herd.

Purchasing and Selling Decisions of Beef Cattle Replacement Females
Production, management and marketing practices vary from one cow-calf producer to the next. However, many cow-calf producers face similar decisions that occur on a frequent basis. One such decision is when to sell and replace a beef cow. The objective of this work is to determine the most profitable age of replacement females to purchase and later sell considering pregnancy status and gestation (months bred).

Reproduction's Impact on Beef Cattle Herd Profitability
The objective of this publication is to compare how the net return to a beef cow-calf operation is impacted by changes in reproductive success. This publication illustrates how changes in reproductive benchmarks (i.e., weaning percentage and calving distribution) can influence profitability of a cow herd.

2022 Cow-Calf Budget
The cow-calf budget was developed to assist Tennessee cattle producers in estimating the cost of production and net return to land and management. This budget should be considered a template or guide to estimating expenses and revenues, and it should not be considered representative of all circumstances. Users of this budget are encouraged to enter information into the budget that reflects their individual situation and production practices. Using information most closely related to a particular operation will improve the decision-making process.

2022 Stocker-Backgrounding Budget
The stocker-backgrounding budget was developed to assist Tennessee cattle producers in estimating the cost of production and net return to land and management. This budget should be considered a template or guide to estimating expenses and revenues, and it should not be considered representative of all circumstances. Users of this budget are encouraged to enter information into the budget that reflects their individual situation and production practices. Using information most closely related to a particular operation will improve the decision-making process.

Improving Beef Cattle Profitability by Changing Calving Season Length
This study evaluated the impacts of calving season length (45-, 60- and 90-day calving season) on net returns for spring- and fall-calving herds in Tennessee. Two additional scenarios evaluated a 45- and 60-day calving season length that assumed the use of an IRM practice to increase the calving rate. The profit and weaning weight maximizing calving date for the spring-calving herd was February 15, and the profit and weaning weight maximizing calving date for the fall-calving herd was September 11.

Reproductive Failure Impacts on Retained Beef Heifer Profitability
The lifeblood of most cow-calf operations is the females that make up the herd. Cow-calf producers make culling and retention decisions on a regular basis that influence profitability. The decision to cull a cow, or to add a female to the herd, is largely based on the animal's structural integrity (i.e., feet, udder), disposition, expected reproductive success, and expected profitability. Thus, there is a certain risk related to cattle prices, cow reproductive efficiency, and calf performance.

Cattle and Beef Market Definitions
This publication contains definitions of terms commonly used when marketing cattle and beef as feeder cattle, finished cattle, and at the packer level. The publication stems from requests from Extension Agents and producers who were not familiar with all the terminology used in the weekly Market Highlights column.

Fall vs. Spring Calving: Considerations and Profitability Comparison
Most cow-calf producers using a defined calving season in the United States follow a spring calving season, while fall calving is the second-most common calving season. Cow-calf producers have several alternatives when it comes to selecting a breeding and subsequent calving season.

Marketing and Price Analysis

Factors Influencing Bred Heifer Price
Replacing breeding females or growing the beef cattle herd with heifers is a frequent decision for beef cattle producers, and it has long-term profitability implications. Producers understand replacement heifers require a substantial financial investment and the return on an animal is uncertain. This publication should provide information to assist buyers and sellers of bred beef heifers in determining the value of the animal.

Lot Size Effects When Selling Feeder Cattle
Before marketing calves, producers must make management decisions such as castration, market location, when to sell and what weight to sell the calves. These management decisions could be influenced by the number of head that the producer is selling.

Safeguard Measures and U.S. Beef Exports to Japan
Given the more restrictive safeguard for U.S. beef in Japan, it was not a surprise the safeguard was triggered in 2022 and that the Japanese government would impose a higher tariff rate on U.S. beef in 2021. In fact, it is not unreasonable to expect imports of U.S. beef to exceed the safeguard level every year, which suggests that the losses reported in this study could be a repeated event for U.S. beef exports. Overall, this report shows that U.S. beef in Japan will face more challenges than beef from competing countries like Australia due to the different safeguard levels between the USJTA and the CPTPP. Note that the CPTPP safeguard is more than double the safeguard that is being imposed on U.S. beef.

Basis Estimates for Feeder Cattle and Fed Cattle
This publication relates to determining a cash price expectation in the future using the CME futures market price.

National Beef Cattle Slaughter Marketing Margins
Historical profitability of U.S. beef cattle slaughtering facilities is not easy to accurately measure since production costs and revenue data are not publicly available. However, for decades, several groups have been interested in knowing this information for various reasons including entrepreneurial purposes. The point of this article is to present national data and discussion around profitability of U.S. beef cattle slaughter facilities.

Feasibility of a Tennessee Cull-Cow Processing Facility
Beef cattle and dairy farmers seek local markets for their culled livestock. Livestock processing facilities offer such opportunities and also assist rural communities in need of economic growth. Provided here is an analysis regarding the feasibility of a cull cattle processing facility in one of the 15 economically distressed counties in Tennessee. Initially examined is the cost of obtaining cows for processing at the facility, followed by a facility location analysis.

To Cut or Not to Cut? Price Comparisons of Bulls and Steers in Tennessee
The decision to cut a male could be based upon age of the calf and/or the method that the producer chooses to utilize for castration. The decision leaves producers with a common question, "Does cutting calves increase revenue?" This publication aims to help producers answer that question.

Price Determinants of Performance-tested Bulls Over Time in Tennessee
When purchasing a bull through an auction, bull buyers generally determine the value of the bull by evaluating phenotypic traits (age, structure, frame, birthweight, breed, etc.), performance measurements (average daily gain, weaning weight, yearling weight), and expected progeny differences (EPDs) (birth weight, calving ease, weaning weight, yearling weight, carcass quality, etc.), which are estimates of how future progeny will perform, on average, for a given trait. A producer's willingness to pay for a bull will vary based on these value-determining factors and how the bull fits the producer's breeding program.

Livestock Sales- Understanding Tax Impacts
Many livestock producers and their tax preparers may be incorrectly reporting income from sales of breeding, draft and milking animals. Incorrect reporting could significantly impact the tax burden. The publication provides a reasonably simple explanation of the issue and provides examples for better understanding. It explains the importance of reporting sales of breeding animals separately from market livestock. Correct reporting may utilize capital gains tax rates and avoid self-employment taxes on sales of breeding livestock. Please share with producers and others as appropriate.

Estimating Restaurant Willingness to Pay for Local Beef
Though few cattle are finished and harvested in Tennessee, consumer demand for local foods has expanded. Thus, the expansion of the local foods movement brings to question, if Tennessee cattle producers can expand marketing opportunities, as well as improve profitability, by producing finished cattle and marketing them via a Tennessee Certified Beef (TCB) program.

Cow-calf Producers' Willingness to Pay for Bulls Resistant to Horn Flies
With an understanding of the costs associated with managing horn flies in cattle and that some animals carry low populations of horn flies, we examined the question of whether cattle producers would be willing to adopt a horn fly-resistant (HFR) bull into their herds. Thus, seedstock producers can use this information to determine if it is worth breeding for the HFR characteristic, while commercial cow-calf producers can use the information to make informed purchasing decisions, if the trait becomes available.

Adding Value Through Cooperative Feeder Cattle Marketing
The focus of this publication is educating cattle producers concerning cooperative marketing of feeder cattle. Our purpose is to 1) define cooperative marketing for feeder cattle and discuss factors to consider when establishing a cooperative marketing effort and the different forms it may take; 2) outline the benefits and potential challenges of cooperatively marketing feeder cattle; and 3) quantify the added value cooperative marketing generates utilizing sale results.

Bull Qualification for Tennessee Agricultural Enhancement Program Through the University of Tennessee Bull Testing Sale
The purpose of this report is to present summary statistics of cost reimbursement eligibility through TAEP for bulls sold in the University of Tennessee bull test sale from 2011-2016. Specifically, we show the percentage of bulls that qualified for cost reimbursement by bull type, which include balanced bull, terminal bull and calving ease bull.

Consumer Willingness to Pay for Tennessee Certified Beef
Recognizing this consumer interest, several livestock producers across Tennessee have delved into direct marketing finished cattle and/or beef products to consumers.Thus, evaluating opportunities to expand cattle marketing alternatives is merited to help meet the governor's challenge.

Basis Estimates for Feeder Cattle and Fed Cattle
Information on the historical difference in the cash and futures price using historical data available from the Extension Marketing Specialist.

Marketing Feeder Cattle Via Video Auction
Cattle producers have several methods to market cattle. Methods commonly used include live auction market, private treaty, graded sale, marketing alliance, video auction, internet auction, and retained ownership through the feedlot.

Profitability of Retained Ownership:Tennessee Beef Evaluation
Retained ownership is a marketing strategy that allows producers to own cattle beyond weaning. The Tennessee Beef Evaluation Program assists Tennessee cattle producers in retaining ownership of their cattle through the feedlot. Summary of Retained Ownership:Tennessee Beef Evaluation

Consumer Preferences for Tennessee Beef: Results of a Consumer Survey
Producers interested in adding value to cattle and directly marketing meat face many challenges such as developing business and marketing plans and starting and expanding operations. A survey of Tennessee consumers was conducted to gather information to learn about customers interested in purchasing local beef and to understand their tastes and preferences for products, shopping behaviors and willingness to pay for local beef.

Marketing Locally Raised Beef
Three focus group meetings were hosted in December 2013 and January 2022 to explore Tennessee beef producers' experiences with marketing value-added beef. The purpose of these focus groups was to gather information about market opportunities and constraints faced by value-added beef producers in order to develop educational materials for interested farmers and industry partners.

Ten Suggestions for Improved Feeder Cattle Production and Marketing
Production of feeder calves is the primary beef production system in Tennessee and the Southeast and the greatest source of agricultural income. Following are proven ways Tennessee cow-calf producers can add value to their feeder cattle if they are carried out from a "total management" standpoint. This means that the practices are part of the management package and all need to be done.

Price Risk Management

Livestock Sales- Understanding Tax Impacts
This publication contains definitions of terms commonly used when marketing cattle and beef as feeder cattle, finished cattle, and at the packer level. The publication stems from requests from Extension Agents and producers who were not familiar with all the terminology used in the weekly Market Highlights column.

Commodity Options as Price Insurance for Cattlemen
Each marketing method carries risks, and one of the most prevalent risks for cattle producers is price risk that is present throughout all stages of production and marketing. Price risk is often thought of as declining cattle prices for sellers, increasing cattle prices for buyers or increasing feed prices for feed users.

Using Futures Markets to Manage Price Risk in Feeder Cattle Operations
Livestock producers, when selling products or purchasing inputs, can either accept the market price at delivery, or point of purchase, or reduce input and product price risks by using pricerisk management tools. One price-risk management opportunity is available through futures market contracts. This publication explains how livestock producers can use futures markets to manage price risk.

Understanding and Using Cattle Basis in Managing Price Risk
Understanding the concept of basis is a key element in developing a sound marketing plan. Basis refers to the relationship between the cash price in a local market and the futures market price. Basis is the difference between the cash price and the futures price for the time, place and quality where delivery actually occurs (Basis = Cash Price – Futures Price).

Livestock Risk Protection Insurance (LRP): How It Works for Feeder Cattle
Beef producers have a limited number of tools to manage price risk associated with marketing cattle. The tools available include futures contracts, options, forward contracting and livestock risk protection insurance (LRP). Each tool brings with it a list of advantages and disadvantages, but each can be used effectively under different circumstances.

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Source: https://utbeef.tennessee.edu/beef-cattle-economics-and-marketing/

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