Deciding when to replace an open beef cow

Gregory A. Ibendahl, John D. Anderson, Leslie H. Anderson

Research output: Contribution to journalArticlepeer-review

6 Scopus citations

Abstract

A cow that fails to conceive must either be kept for a year without revenue or replaced by a bred heifer. This choice is a unique case of comparing investments with different economic lives because the potential replacement asset is just a newer version of the old asset. In this study, a net present value model is developed that eliminates the problem of finding a common timeframe. Results indicate there are often times producers should keep the open cow. Whenever feed costs are low, the price differential between cull cows and replacement heifers is high, or the calf crop value is low, retaining open cows becomes more desirable.

Original languageEnglish
Pages (from-to)61-74
Number of pages14
JournalAgricultural Finance Review
Volume64
Issue number1
DOIs
StatePublished - May 5 2004

Bibliographical note

Publisher Copyright:
© 2004, Emerald Group Publishing Ltd. All rights reserved.

Keywords

  • Bred heifer
  • Net present value
  • Open cow
  • Perpetual annuity
  • Replacement decision
  • Unequal asset life

ASJC Scopus subject areas

  • Agricultural and Biological Sciences (miscellaneous)
  • Economics, Econometrics and Finance (miscellaneous)

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