| Cattle producers in the Greater Yellowstone Area can eliminate the economic consequences of domestic herds contracting brucellosis by converting from cow/calf/yearling operations to stocker operations. The farm-level costs of this transition are not well understood though. I therefore create enterprise budgets for three transition strategies: a seven-year transition to stockers, a single-year transition to 600-pound purchased stockers, and a single-year transition to 700-pound purchased stockers. I use Risk simulation to simulate distributions for returns over variable costs (ROVC) and net present value (NPV), based on historical calf and hay prices, for each transition strategy and for the baseline cow/calf/yearling operation. Although NPV during the transition to a stocker operation is larger for some strategies than for the cow/calf/yearling operation, this is only due to a short-term injection of revenue from liquidating the breeding herd. Once this initial injection of revenue fades, the cow/calf/yearling operation generates a higher annual return over variable costs than any of the stocker strategies. A transition to a stocker operation would only be economically justifiable, for brucellosis risk-management purposes, if the expected annual cost of a herd contracting brucellosis were sufficiently high, or if a sufficient economic incentive were offered. |
