| Abstract: | The main purpose of this study was to develop a tool to analyze the effects of projected investment/disinvestment patterns for beef breeding cattle on the projected financial condition and performance of the farm or ranch firm. A review of previous studies showed that: (1) no explicit relationship between proposed beef cattle investment/disinvestment actions and the financial performance and condition of the beef cow-calf producing firm had been developed, (2) previous works had been weak in linking the work done by animal scientists with respect to actual reproduction and production parameters to the development of expectations for these parameters by the beef cow investment/disinvestment decision maker, (3) previous works had not focused on the influence of proposed investment/disinvestment in beef cows on the age composition of the herd and its resulting impact on herd productivity and the overall financial structure of the firm. The study first develops theoretical linkages between investment/disinvestment actions in the beef breeding herd and the financial condition and performance of the firm. The study then develops a decision support aid titled the Beef Cow Investment Analysis System to assist producers in making sound investment/disinvestment decisions with respect to the beef cow enterprise. The Beef Cow Investment Analysis System is composed of four modules that provide the user with assistance in developing input parameters and carrying out the analysis for the beef cow investment/disinvestment decision. These modules provide production and reproduction parameters derived from experimental data to aid the user in the decision making process, along with an analysis of the projected financial condition and performance of the firm. Finally, the study applies the Beef Cow Investment Analysis System to an actual firm. The analysis concludes that for this particular firm, liquidation of the beef cattle enterprise leads to a stronger financial condition and improved financial performance than does continued operation at current levels of production. |
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