Masters Theses

Date of Award

12-1980

Degree Type

Thesis

Degree Name

Master of Science

Major

Agricultural Economics

Major Professor

Irving Dubov

Committee Members

L.H. Keller, E.L. Rawls

Abstract

An analysis was made to estimate efficient adjustments the Tennessee beef industry can make to changing supply-price relations for petro-based inputs. The focus was on the economic feasibility of finishing feeder cattle produced inside the state instead of moving them to feedlots in either the Corn Belt or High Plains areas. Budgetary analysis was used to estimate costs of all vertical stages after backgrounding, including movement to feedlots, feeding, movement to slaughter points, slaughter, and movement to distribution points. The study focused on the comparative advantage of three cattle feeding areas in Tennessee located within 100 mile radii of pricing points in Knoxville, Columbia, and Memphis relative to the Corn Belt and High Plains. Cost budgets for Tennessee were based on two feeding systems - - one silage based (silage, hay, corn, and protein supplement) and the other grain based (whole shelled corn, protein supplement). These budgets were compared with the costs of feeding cattle in the Corn Belt using the system whose costs are published in the Livestock and Meat Situation as typical for that area. Comparisons were made also with the costs of custom feeding operations in the High Plains, using the system whose costs are published in the Livestock and Meat Situation. Cost estimates for the Corn Belt and Great Plains areas were adjusted to take into account increased shrinkage, transportation costs, and death losses that result from moving Tennessee feeder animals for finishing in these other two areas. Once the current total costs for feeding and transporting cattle were derived, the effects of projected increases in fuel costs of 50, 100 and 200 percent were then substituted for the current prices of transportation and feed.

The results showed feeding cattle in Tennessee to be competitive with the Corn Belt and High Plains regions. Given increased fuel price situations, feeding costs in Tennessee rose less than in either the Corn Belt or the High Plains. Increased fuel costs had a much greater estimated effect on the cost of cattle feeding than on the cost of of transporting feeder steers.

Within the state, the grain system offered a lower cost ration than the silage system under all fuel cost situations. Other factors which should be considered before engaging in a beef feeding enterprise in Tennessee include; price and availability of corn, initial investment costs and managerial ability.

Other data gathered included slaughter costs for the three areas, estimated total beef consumption in Tennessee, and the potential number of feeder cattle in the state. Results indicated that there would be enough feeder cattle and slaughter capacity in Tennessee to meet the state beef consumption requirement without having to rely on out-of-state sources.

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