Impacts of economic factors influencing net returns of beef feedlot heifers administered two implant programs and fed for differing days-on-feed from pooled randomized controlled trials.

The objective of this research was to evaluate the effects of two implant programs and differing days-on-feed (DOF) on net returns of beef feedlot heifers using sensitivity analyses of key economic factors. Crossbred beef heifers [n = 10,583; initial weight 315 kg (± 20.1 SD)] were enrolled across three trials (one Kansas, two Texas feedlot trials). Heifers were blocked by arrival and randomly allocated to one of six pens, resulting in a total of 144 pens and 24 blocks. Pen was randomly assigned to treatment as a 2 × 3 factorial. Implant programs were: IH + 200-Revalor-IH at initial processing, and a terminal implant after approximately 90 DOF (Revalor-200), or, XH-a single implant at initial processing (Revalor-XH). The DOF treatments were: heifers fed to a standard baseline endpoint (BASE) or heifers fed for an additional + 21 or + 42 d beyond BASE. Pen-level partial budgets were used for economic sensitivity analyses, which varied price points of single pricing components with all other components fixed. Variable components were live-fed cattle prices, base carcass prices (i.e., dressed), Choice-Select spread (CS-spread), and feed and yardage prices (FYP). For each, a Low, Mid-Low, Middle, Mid-High, and High price was chosen. Linear mixed models were fit for statistical analyses (α = 0.05). There were no significant two-way interactions (P-values ≥ 0.14). Regardless of the variable component evaluated, XH heifers had poorer net returns than IH + 200 at all prices (P ≤ 0.04). Selling live, the + 21 and (or) + 42 heifers had lower net returns than BASE at every fed cattle price point (P < 0.01). Selling dressed, the + 21 and (or) + 42 heifers had lower returns than BASE at Low, Mid-Low, and Middle fed cattle base prices (P < 0.01); there were no significant DOF differences at Mid-High, or High prices (P ≥ 0.24). Net returns were lower for + 42 than BASE at all CS-spreads (P ≤ 0.03), while BASE and + 21 did not differ significantly. Longer DOF had lower net returns than BASE when selling live at every FYP (P < 0.01) except at the Low price (P = 0.14). Selling dressed, there was no significant effect of DOF at Low or Mid-Low FYP (P ≥ 0.11); conversely, extended DOF had lower net returns than BASE at Middle, Mid-High, and High FYP (P < 0.01). Overall, there was minimal economic evidence to support extending feedlot heifer DOF beyond the BASE endpoint, and when feeding longer, larger reductions in return were observed when marketing live as opposed to dressed.

Consumer Reactions to E. Coli and Antibiotic Residue Recalls: Utility Maximization vs. Regret Minimization.

Food safety remains a major issue to many consumers. Previous studies examining the economic impact of food safety recalls have focused on Class I recalls. Antibiotic residue in meat products, a Class II recall, has increased in consumer importance yet little is known about how much research and development expenditure should be allocated to reduce antibiotic residue pre- and post-harvest. This study compares demand elasticities and the decrease in willingness to pay in response to either an E. coli (Class I) or antibiotic residue (Class II) recall. We compare and contrast two competing behavioral frameworks, Random Utility and Regret Minimizing. Modeling behavior using the random regret framework is found to be more powerful for assessing consumer responses. In addition, we explore if different groups of consumers exist that either maximize utility or minimize regret. Consumer devaluations of E. coli (Class I) are 40-65% larger than antibiotic residue (Class II). Approximately 60% of consumers are identified as regret minimizers and 40% were identified as utility maximizers. While industry response and government policy recommendations differed conditional on modeling framework, the regret minimizing framework required smaller price discounts than regret minimizing to maintain the same level of market share.

Net return distributions when metaphylaxis is used to control bovine respiratory disease in high health-risk cattle.

This study's objective was to estimate net returns and return risk for antimicrobial metaphylaxis options to manage bovine respiratory disease (BRD) in high health-risk feedlot cattle. The effectiveness of antimicrobials for metaphylaxis varies by cattle population. How differing antimicrobial effectiveness translates to net return profitability for heterogeneous cattle populations is less understood. Net returns and return risk were assessed using a net return simulation model adapted to allow for heterogeneity in high health-risk cattle placement characteristics and antimicrobial choice to control BRD. The net return model incorporated how antimicrobials modify BRD health and performance outcomes. Health and performance outcomes were calibrated from published literature and proprietary feedlot data. Proprietary data came from 10 Midwestern feedlots representing nearly 6 million animals and 50,000 cohorts. Twelve placement-by-metaphylaxis decision combinations were assessed: high health-risk steer placement demographics were 600 or 800 lb steers placed in Winter (Oct-Mar) or Summer (Apr-Sept) managed with one of three different health programs: "no metaphylaxis," "Upper Tier" antimicrobial, or "Lower Tier" antimicrobial. Net return distributions were compared between "no metaphylaxis" and a specific antimicrobial tier within specific cattle populations. We found the expected incremental net return of administering an "Upper Tier" ("Lower Tier") antimicrobial for metaphylaxis compared to "no metaphylaxis" for high health-risk steers was $122.55 per head ($65.72) for 600 lb and $148.65 per head ($79.65) for 800 lb winter placements. The incremental expected net return and risk mitigated by metaphylaxis varied by placement weight, season, and antimicrobial choice. The probability net returns would decline by at least $50 per head was significantly reduced (from approximately 4% to 40%) when any antimicrobial was used on high health-risk steers. Both tiers of antimicrobials used for metaphylaxis increased expected net returns and decreased net return variability relative to no metaphylaxis. Thus, feedlots were more certain and realize a greater profit on high health-risk pens of steers when metaphylaxis was used. This occurred because the reduction in cattle health and performance outcomes using any antimicrobial was sufficiently large to cover added initial and subsequent antimicrobial costs. Results aid in assessing metaphylaxis strategies in high health-risk cattle.

Beef alliances: motivations, extent, and future prospects.

With their growth, it is important to consider how alliances will impact the beef industry in the future. Alliances have the potential to make sweeping changes to cattle production, live and feeder cattle marketing, food safety protocols, use of government grades and standards, ownership structure, supply chain management, wholesale and retail product marketing, risk management, and many other industry activities. In an effort to address these issues, this article addresses the following questions: What is an alliance? What has motivated their proliferation? What have we learned from alliances? What aspects of alliances affect their likelihood of success or failure? What is the future of alliances? Are they a fad or a long-term evolving industry structural change?