Production Inefficiency in Fed Cattle Marketing and the Value of Sorting Pens into Alternative Marketing Groups Using Ultrasound Technology

Stephen R. Koontz, Dana L. Hoag, John R. Brethour and Jodine Walker

Journal of Agricultural and Applied Economics, 2008, vol. 40, issue 03

Abstract: The cattle industry batch markets animals in pens. Because of this, animals within any one pen can be both underfed and overfed. Thus, there is a production inefficiency associated with batch marketing. We simulate the value of sorting animals through weight and ultrasound measurements from original pens into smaller alternative marketing groups. Sorting exploits the production inefficiency and enables cattle feeding enterprises to avoid meat quality discounts, capture premiums, more efficiently use feed resources, and increase returns. The value of sorting is between $15 and $25 per head, with declining marginal returns as the number of sort groups increases.

Keywords: cattle feeding; production efficiency; simulation; sorting; value-based marketing; ultrasound; Agribusiness; Livestock Production/Industries; Marketing; Research and Development/Tech Change/Emerging Technologies; C15; D21; D23; Q12 (search for similar items in EconPapers)
Date: 2008
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