Economic Outlook for Representative Ranches Given the August 2006 FAPRI/AFPC Baseline

The Agricultural and Food Policy Center (AFPC) at Texas A&M University develops and maintains data to simulate twelve representative cow/calf operations in major production areas of ten states. The chief purpose of this analysis is to project those ranches’ economic viability for 2006 through 2011. The data necessary to simulate the economic activity of these operations is developed through ongoing cooperation with panels of ranchers in each of these states. The Food and Agricultural Policy Research Institute (FAPRI) provided projected prices, policy variables, and input inflation rates in their August 2006 Baseline that were used to analyze the viability of the AFPC representative ranches. Under the August 2006 Baseline, the Montana ranch (MTB500), the Colorado ranch (COB250), the South Dakota ranch (SDB450), the Southwest Missouri ranch (MOB250), the Central Missouri ranch (MOCB400), and the Texas Rolling Plains ranch (TXRB500) are all considered in good liquidity condition (less than a 25 percent chance of negative ending cash in 2011). No ranches fall into the marginal classification (between a 25 percent and a 50 percent chance of negative ending cash in 2011). The California ranch (CAB500), the Nevada ranch (NVB700), the Wyoming ranch (WYB500), the New Mexico ranch (NMB240), the South Texas ranch (TXSB175), and the Florida ranch (FLB1155) are all considered in poor liquidity condition (greater than a 50 percent chance of negative ending cash in 2011).