A model for optimal management decisions in integrated beef stocking-finishing operation

Abstract

The objective of this study was to develop a normative model of a mixed farming operation that included production of beef cattle, feed crops, cash grain, and pasture. A linear program was designed to determine profit maximizing cattle purchase and sale weights, optimal rations, and optimal resource mixes for production of feed inputs. Included were variable fertilization rates on crop production activities, alternative cattle purchase and sale weights, and alternative rates of cattle weight gain, each expressed on quarterly bases over a two-year decision horizon. The model was utilized to find optimal farm plans for typical Virginia beef farms in the Shenandoah and Appalachian areas under three price scenarios: 1973-1974 prices, 1976-1977 prices, and 1968-1977 "average year" prices. Results of the analysis indicated, in each of these cases, that profits would be maximized by production of lighter weight cattle at maximum rates of gain. Various parametric changes were applied to the Appalachian model under the 1968-1977 "average year" price scenario to evaluate the effects of such changes on the optimal farm plan. For the most part, changes in crop yields and corn prices did not significantly alter optimal production patterns for cattle. Although cattle numbers tended to respond positively to increases in yields and decreases in corn prices, cattle continued to be produced at maximum daily gains and at lighter weights. Only when the negative impact of cattle weight on price per hundredweight was increased substantially did the optimal rate of weight gain decline.