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Economics of Purchasing Genetically Superior Beef Bulls

Published online by Cambridge University Press:  05 September 2016

G. M. Clary ,
J. W. Jordan  and
C. E. Thompson
G. M. Clary
Affiliation:
Department of Agricultural Economics and Rural Sociology, Clemson University
J. W. Jordan
Affiliation:
Department of Agricultural Economics and Rural Sociology, Clemson University
C. E. Thompson
Affiliation:
Department of Animal Science, Clemson University
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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.

Keywords

beef bullsgenetic progressafter-tax returnbid price
Type
Articles
Information
Journal of Agricultural and Applied Economics , Volume 16 , Issue 2 , December 1984 , pp. 31 - 36
Copyright
Copyright © Southern Agricultural Economics Association 1984

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