Joy Thesis Powerpoint

A case study of the economics of

Raramuri Criollo (RC) cattle production in

the deserts of Southern New Mexico

Agricultural Economics and Agricultural Business

Joy C. Enyinnaya, B.Sc.Thesis Defense

July 15, 2016

Prof. Allen Torell, advisor

Introduction


Introduction MethodsResults/

Findings

Summary/

Implications

Future Studies

Demand for grass-fed, naturally raised, locally produced meats is

increasing

Finding breeds of cattle in the United states that can efficiently

finish well on grass had been problematic

Raramuri Criollo cattle possess a unique foraging behavior and are

willing to travel long distances from water

Criollo improved grazing distribution


RC unique features


Why is Criollo Cattle, a potentially viable economic

alternative?

• Improved grazing distribution increases harvested

AUMS

- Decrease grazing pressure on over-used areas

• High fertility and longevity

• Hardy, self-reliant and suited to arid environments

• Quality carcass from forage diet

• Mild temperament

• Good mothers and small calves

‒Reduced calving problems

‒Potential for cross-breeding

• Healthy with minimal vaccination,

parasite and fly control.

The Gap• Lack of information on the economic potential of Criollo

cattle because production only started about 12 years ago

• Limited information on the cost and returns of producing

livestock on the desert ranches of the Southwest



Findings

Summary/

Implications

Future Studies

Objectives Compare cost and return estimates for

producing Raramuri Criollo (RC) cattle

with Angus-Hereford (A x H) cross cattle

typically found on Chihuahuan desert

ranches.

Key production and economic differences

include

Foraging behavior

Production and live weight

Market and sale price

Production costs



Objectives Explore the economics of alternative

marketing options for RC cattle with

sales at farmer’s markets, based on

the direct marketing experiences of

Dennis and Deborah Moroney of the

47 Ranch near Bisbee, AZ.


Findings

Summary/

Implications

Future Studies

Methods (JER)Terms and definitions

• Animal Unit (AU) – measure of animal equivalency

based on forage demand relative to 1000 pound

cow

• Animal unit month (AUM)- amount of forage required

by an AU per month

• Animal Unit Yearlong (AUY)- amount of forage

required by an AU per year


Methods (JER) The USDA-ARS Jornada Experimental Range (JER) introduced RC

cattle from Mexico in 2005

An enterprise budget was developed for 225 AUY RC herd based on

production and marketing experiences of the JER (Primary data)

An enterprise budget was developed for a 150 AUY A x H cow/calf ranch

based on previously published budgets (Secondary data)



Findings

Summary/

Implications

Future Studies

Methods

Based on RC improved grazing distribution characteristic, a

50% increase in carrying capacity was considered; - A x H cattle – 150 AUY capacity

- Criollo cattle – 225 AUY capacity

Two different beef price scenarios were considered:– Scenario 1: Average real 2011-2015 beef prices

– Scenario 2: Record 2015 high beef prices

On-the-hoof sale prices for RC cattle were discounted by about 20% based on JER marketing

experience.



Findings

Summary/

Implications

Future Studies

Methods (47 Ranch)


Farmers market partial budget

Animal purchase

cost

Feeding cost

Slaughter/ Processing

cost

Refrigeration cost

Marketing cost

A farmers market partial budget was developed based on marketing

experiences of Dennis and Deb Moroney of the 47 Ranch (Primary data)

Two different beef price scenarios were also considered (5 year average

prices and 2015 high beef prices)

Cost variables considered in the farmers market partial budget include


Findings

Summary/

Implications

Future Studies

Results/FindingsProduction differences


Description A x H RC

Mean cow culling age1 10 18

Mean bull culling age 7 12

Calving month April June

Calf crop at weaning 85% 91%

Cow-to-bull ratio 16:1 30:1

Mean calf birth weight 34 12

Steer sale weight 215 @ 7 months 431 @ 30 months

Heifer sale weight 204 @ 7 months 318 @ 24 months

Average cow weight 454 363

Average bull weight 612 499

Cow, bull and heifer death loss (%) 1% 1%

Sale animals death loss (%) 2% 1%1 age in years; weight in kg


Findings

Summary/

Implications

Future Studies

Forage demand differences



Findings

Summary/

Implications

Future Studies

1.00

0.71

1.25

0.57

1.36

0.85

0.50

1.07

0.470.66

0.88

2.00

0.00

0.50

1.00

1.50

2.00

2.50

Mature cows Replacementheifers (13-24

months)

Bulls Weaned calves (6-12 months)

Growers (13-24months)

Finishing (25-30months)

Total AUY permature cow

AU

Y

Animal Class

AxH RC

Beef price scenarios for AxH


$0.00

$1.00

$2.00

$3.00

$4.00

$5.00

$6.00

$7.00

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

$/k

g

Year

Heifers -wt400-500

Steers -wt400-500

Source: Livestock Marketing Information Center, 2016


Findings

Summary/

Implications

Future Studies


Cost Differences

Farmer’s Market Partial Budget



Findings

Summary/

Implications

Future Studies

47 Ranch Marketing effortLoads cows to trailer, drives to UA meat lab

for slaughter/processing,

200 miles

4 weeks later: picks up processed meat,

delivers to commercial customers

Drives 36 miles to Nathen (Walk-in freezer) to store rest of the meat

Thursdays: farmers market, Sierra

vista, spends about 8 hours in direct marketing, 100

miles

Saturdays: farmers market,

Bisbee, 120 miles



Findings

Summary/

Implications

Future Studies

Prices/kg of meat cuts sold at farmers market


$24.86

$15.43

$13.23

$22.05

$18.37

$15.16

$7.75

$5.20$6.12

$8.57

$5.82$5.11

$0.00

$5.00

$10.00

$15.00

$20.00

$25.00

$30.00

chuck steaks cowboy rib steak Round steak sirloin steak roast ground beef andstew meat

$/k

g

Meat cut

Farmers market Grocery store


Findings

Summary/

Implications

Future Studies


$3,133/head

$944/head

$100/head $80/head

$22.15/head

$1,319/head

$2,465/head

$668/head

$1,108/head

$2,254/head

$879/head

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

Revenue Slaughter andprocessing cost

Marketing cost Feeding cost Refrigerationcost

Animal purchasecost

Total cost Net returns

2015 High prices

5-year average prices

Farmers market partial budget analysis


Findings

Summary/

Implications

Future Studies

Summary and Implications• Favoring RC production

– Criollo cattle is a profitable option for a large, expansive, and poorly watered

pasture

– RC heifers make great breeders

– With 50% increase in carrying capacity, there is breakeven for RC

enterprise

– Reduced production costs

– Improved rangeland health and restoration of overgrazed areas

• Challenges for RC production

– Lack of structured market

– AxH can raise 3 sets of steer calves in the duration of raising one RC steer

calf

– Lack of infrastructure for slaughter and processing



Findings

Summary/

Implications

Future Studies

Future studies• Explore the economics of combining production

and marketing estimates in one budget

• Explore the economics of different marketing

strategies

– Cross breeding Criollo cattle

– Phone and internet sales

– Subscription based buying clubs



Findings

Summary/

Implications

Future Studies

THANK YOU


Joy Thesis Powerpoint

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