Establishing The Most Profitable Backgrounding Strategy For Different Weight Groups Of Weaned Bonsmara Calves Based On Economic Margins

C. Roodman, Maré, F.A. and Grové, B.

No 345978, Agricultural Economics Society (AES) 98th Annual Conference, The University of Edinburgh, Edinburgh, UK, March 18-20, 2024 from Agricultural Economics Society (AES)

Abstract: Backgrounding is the period between calf weaning and feedlot placement. There is no predetermined period for how long calves of specific weight classes should be backgrounded. The primary objective of this study was to establish which backgrounding period is the most economical and risk efficient for various weight groups of weaned Bonsmara calves in the Free State province of South Africa. A trial was conducted to establish performance data for four backgrounding treatments for four weaning weight groups. The performance data obtained from the trial were incorporated into an economic simulation model to determine the economic gross margins. Economic gross margins include the opportunity cost of the backgrounding pasture as the pasture rent. Gross margins for weekly cycles in 2020 were calculated. Furthermore, the gross margins were integrated into a stochastic efficiency with respect to a function (SERF) analysis to rank the strategies based on their risk efficiency. The findings indicated that no backgrounding should be conducted; instead, animals should be placed on the feedlot immediately. Economic gross margins and risk efficiency decreased as the backgrounding periods increased. However, when excluding the opportunity cost of land and simply calculating the accounting gross margins, the recommendations differ. Longer backgrounding periods are then more profitable and risk efficient, with the immediate feedlotting strategies being the least preferable. The conclusion is thus that the backgrounding pastures are too valuable to conduct backgrounding.

Keywords: Livestock; Production/Industries (search for similar items in EconPapers)
Pages: 18
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aes324:345978

DOI: 10.22004/ag.econ.345978

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