Economics of purchasing genetically superior beef bulls
Clary, G.M. | Jordan, J.W. | Thompson, C.E.
Extract: Net present value analysis is used to derive the marginal bid price for a beef herd sire from after-tax net revenues and cash flow influenced by genetic improvements. Marginal bid price represents the additional amount a producer could pay, above the present value of the current beef herd sire, for a sire expected to exhibity superior performance as reflected by increased average weaning weights of offspring. An analysis of the profitability of purchasing a breeding bull for a commercial beef cow herd is presented as an application. Several alternative scenarios illustrate the impact of selected determinants on the marginal bid price of a bull.
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