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Farm economic thinking and the genetic improvement of fertility in northern beef herds

Fred Chudleigh, Maree Bowen and Bill Holmes

No 285095, 2019 Conference (63rd), February 12-15, 2019, Melbourne, Australia from Australian Agricultural and Resource Economics Society (AARES)

Abstract: Low levels of reproduction efficiency have been considered a key constraint of the economic performance of beef herds grazing the rangelands of northern Australia. Considerable effort has been directed at resolving the issue and beef geneticists have developed technologies to allow the selection of animals with superior traits for fertility. It has been shown that incorporating selection for these traits with other herd management strategies will lead to herds with higher reproduction efficiency. However, modifying rates of reproduction efficiency will impact herd structures and output over time, making prediction of the economic value of the genetic improvement of fertility a relatively complex task. Consideration of alternative management strategies available to improve herd performance is also necessary to understand the relative value of improving reproduction efficiency. This analysis evaluated the profitability of genetically changing fertility in two regions of northern Australia: the Katherine region of the Northern Territory and the Fitzroy Natural Resource Management (NRM) region of central Queensland, using property-level, regionally-relevant property models that determine whole-of-business productivity and profitability over a 30-year investment period. We assessed the value of the genetic improvement of fertility by comparison to baseline production systems with typical reproduction efficiency for each region and to alternative management strategies available to the property manager. We demonstrate that appropriately assessing the biological, financial and economic components is critical to estimating the value of genetically improving the reproduction efficiency of a beef herd in northern Australia. An alternative approach of generating $Indexes represents a flawed approach to identifying the value of genetically improving fertility in northern beef herds giving potentially misleading and incorrect results. Our analyses indicated that purchasing bulls with different genes for fertility is likely to have variable impacts and unexpected outcomes on the profitability and riskiness of beef enterprises in northern Australia. Furthermore, there are alternative investments available to beef producers that can produce better economic outcomes. Good quality science in the area of genetic improvement of fertility needs to be paired with equally sound economic methods to ensure appropriate conclusions are reached about value to beef producers and the industry.

Keywords: Livestock; Production/Industries (search for similar items in EconPapers)
Pages: 37
Date: 2019-02
New Economics Papers: this item is included in nep-agr
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aare19:285095

DOI: 10.22004/ag.econ.285095

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