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Economics Of Purchasing Genetically Superior Beef Bulls

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  • Clary, Gregory M.
  • Jordan, Johnny W.
  • Thompson, Carl Eugene

Abstract

Net present value analysis is used to derive the marginal bid price for a beef herd sire from after-tax net revenues and cash flow influenced by genetic improvements. Marginal bid price represents the additional amount a producer could pay, above the present value of the current beef herd sire, for a sire expected to exhibit superior performance as reflected by increased average weaning weights of offspring. An analysis of the profitability of purchasing a breeding bull for a commercial beef cow herd is presented as an application. Several alternative scenarios illustrate the impact of selected determinants on the marginal bid price of a bull.

Suggested Citation

  • Clary, Gregory M. & Jordan, Johnny W. & Thompson, Carl Eugene, 1984. "Economics Of Purchasing Genetically Superior Beef Bulls," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 16(2), pages 1-6, December.
    • Handle: RePEc:ags:sojoae:29739
    DOI: 10.22004/ag.econ.29739
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    References listed on IDEAS

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    1. Anthony H. Chisholm, 1966. "Criteria for Determining the Optimum Replacement Pattern," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 48(1), pages 107-112.
    2. Kay, Ronald D. & Rister, M. Edward, 1977. "Income Tax Effects On Beef Cow Replacement Strategy," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 9(1), pages 1-4, July.
    3. Melton, Bryan E., 1980. "Economics Of Beef Cow Culling And Replacement Decisions Under Genetic Progress," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 5(2), pages 1-12, December.
    4. Bentley, Ernest & Waters, James R. & Shumway, C. Richard, 1976. "Determining Optimal Replacement Age Of Beef Cows In The Presence Of Stochastic Elements," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 8(2), pages 1-6, December.
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    Cited by:

    1. Dhuyvetter, Kevin C. & Schroeder, Ted C. & Simms, Danny D. & Bolze, Ronald P., Jr. & Geske, Jeremy, 1996. "Determinants Of Purebred Beef Bull Price Differentials," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 21(2), pages 1-15, December.
    2. Mintert, James & Blair, Joanne & Schroeder, Ted & Brazle, Frank, 1990. "Analysis of Factors Affecting Cow Auction Price Differentials," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 22(2), pages 23-30, December.

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    Keywords

    Livestock Production/Industries;

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