Firm level beef supply : a simulation and linear programming application in East Texas

Abstract

Beef production is the foremost agricultural activity in East Texas. Although production practices vary, the cow-calf enterprise dominates. Much of the land is used for production of forages that vary from native grasses to tame pastures. But high production costs are causing producers to search for more profitable combinations of forage and livestock systems. To achieve this goal, they need better and more accurate information on forage and livestock production relationships. The overall objective of this study is to identify the most profitable forage and beef systems, both under certainty and uncertainty, for an experimental cow-calf farm in East Texas. Specific objectives addressed are: (a) to generate reliable input-output coefficients for beef calves, stockers, and slaughter cattle for this farm, (b) to determine the effects on beef production of simultaneous changes in quality and quantity of forages, of different calving seasons, and of different cattle enterprises, (c) to analyze effects of changes in product and factor prices on the firm's supply of beef in the short and long run, and (d) to develop expected profit-risk frontiers. Three models, a biological beef cattle simulation model (the TAMU model) and two linear programming models (the acreage model and the economic model), are interfaced to achieve the objectives of this study. Given four livestock enterprises (cow-calf, Stocker, drylot-finishing, and forage-finishing), three alternative forage systems (Coastal bermudagrass, Coastal bermudagrass overseaaed with rye-ryegrass, and common bermudagrass overseeded with crimson clover-ryegrass), and four levels of winter feeding (ad lib and 80 percent, 60 percent, and 40 percent of ad lib), the TAMU model is used to simulate beef cattle production. Using the simulated results as model inputs, the acreage model is applied to determine for each of the above the least cost acreage of a particular forage, purchased hay and supplements required to support the simulated herd. Then the results generated by these two models are used as data in the economic model. The economic model is used (a) to solve for the optimal livestock enterprises, forage systems, and winter feed stress level, (b) to derive firm-level beef supply response under certainty, and (c) to develop expected E-A frontiers under uncertainty...