Economic analysis of alternative cattle breeding systems with retained ownership through the stocker and feeder phase

Scope and method of study. Beef cattle production is a critical component of Oklahoma's agricultural sector. As such it warrants research efforts to identify and explore alternative production and marketing methods which increase productive and economic efficiency of beef operations. Alternative beef crossbreeding systems with the option to retain ownership were economically evaluated in this study. Eleven crossbreeding systems were designed, with animal performance estimates developed for each. Two approaches were used. First a static analysis was conducted in a perfect knowledge framework using linear programming. Second, a risk analysis, with within-year production and price variables stochastic, was conducted using simulation modeling. Using returns distributions from the simulation analysis, stochastic dominance criteria were used to provide a partial ordering of selected breeding systems and retained ownership alternatives.;Findings and conclusions. Selection of breeding systems has a significant influence on ranch profitability. A two breed combined rotational-terminal sire system with medium frame, medium milk potential breeds in the rotation was the returns-maximizing system. The returns-maximizing ranch plan involved grazing wheat pasture, followed by feedlot finishing. Optimal breeding system varied with the production and marketing plan. A large frame, heavy milk potential two breed rotational system maximized returns when selling weaned calves and stockers. According to the risk analysis, variability in returns increased as calves were retained longer. Conclusions made in the stochastic dominance analysis mirror actual decisions made by producers. Selling weaned calves or wheat pasture stockers was the preferred alternative for strongly risk averse producers, while retention through finishing was preferred by risk seekers.