An economic evaluation of the differences between intensive and extensive beef production systems

Area of Science:

• Agricultural Economics
• Animal Science
• Ruminant Nutrition

Background:

• Optimizing economic efficiency in cattle production is crucial for producers.
• High-forage feeding strategies offer potential cost advantages but require careful economic evaluation.
• Understanding the impact of different feeding systems on profitability is essential for the beef industry.

Purpose of the Study:

• To develop an economic model for evaluating cattle finishing systems.
• To compare the cost-effectiveness of intensive (high-grain) versus extensive (high-forage) finishing systems.
• To identify key economic factors influencing the profitability of different cattle production models.

Main Methods:

• Utilized data from two experiments involving Charolais-cross calves and British breed steers.
• Compared an intensive system (immediate high-grain finishing) with an extensive system (wintering on crop residues, summer grazing, then high-grain finishing).
• Analyzed economic criteria including cost of gain, break-even price, and the impact of input costs like corn price and interest rates.

Main Results:

• The extensive system generally yielded lower overall cost of gain and final break-even prices.
• Interest costs were higher in the extensive system, but overall profitability favored this approach.
• Corn price and feeder calf purchase price affected both systems similarly, while interest rates and yardage costs impacted systems differently.

Conclusions:

• Extensive cattle finishing systems, incorporating high-forage phases, are typically more economically viable.
• The additional weight gained in extensive systems often offsets higher interest costs, leading to lower break-even prices.
• Economic models are valuable tools for assessing the profitability of diverse cattle production strategies.