DeVuyst, Eric A.

January, 2018

Optimal Beef Cow Weights in the U.S. Southern Plains

By: Bir, Courtney; DeVuyst, Eric A.; Rolf, Megan; Lalman, David
This research investigates net present value–maximizing beef cow weights for U.S. Southern Plains cow–calf operations. The relationship between cow weight and calf weaning weight was estimated and weaning weights were simulated for a 15-year time period. Annual returns were computed using cow–calf revenues and production costs for cows with mature weight between 950 and 1,800 pounds. A grid search showed that optimal cow size was 950 pounds across scenarios. Selection for growth may improve feedlot profitability but has deleterious effects on cow–calf producers. Development of smaller-framed maternal lines may improve sector profits.
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September, 2016

Effect of Location Variables on Feeder Calf Basis at Oklahoma Auctions

By: Mallory, Shannon; DeVuyst, Eric A.; Raper, Kellie C.; Peel, Derrell; Mourer, Gant
Past research has reported differences in feeder cattle prices received due to location of sale barns, but little is reported on the source of those differences.We developed a feeder calf hedonic pricing model that includes location-specific characteristics. Local factors may affect transaction costs for buyers and sellers, impacting the basis. Results show that basis increased $0.64/cwt for every 100,000 acres of wheat within a 100-mile radius. Basis decreased $0.07 per mile from four-lane roads. Basis decreased $1.99 per 1% of value-added volume. The impact of lot size, weight, hide color, frame, gender, and other phenotypic characteristics were also analyzed.
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May, 2016

Using Genetic Testing to Improve Fed Cattle Marketing Decisions

By: Thompson, Nathanael M.; DeVuyst, Eric A.; Brorsen, B. Wade; Lusk, Jayson L.
We estimate the value of using genetic information to make fed cattle marketing decisions. Efficiency gains result from sorting cattle into marketing groups, including more accurate optimal days-on-feed and reduced variability of returns to cattle feeding. The value of using genetic information to selectively market cattle ranged from $1–$13/head depending on how a producer currently markets cattle and the grid structure. Although these values of genetic information were generally higher than those reported in previous research, they were still not enough to offset the current cost of genetic testing (about $40/head).
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April, 2014

Reducing Self-Selection Bias in Feeder Cattle Premium Estimates Using Matched Sampling

By: Williams, Brian R.; DeVuyst, Eric A.; Peel, Derrell S.; Raper, Kellie Curry
Past value-added research employs hedonic pricing models to estimate premiums associated with value-added feeder cattle characteristics. However, hedonic pricing models require restrictive assumptions and impose a functional form. Producers also self-select into a treatment group, potentially biasing estimates. Using propensity score matching, we reduce potential bias from producer self-selection and from imposing a functional form. Results suggest that hedonic pricing models may be negatively biased in estimates of premiums received by value-added calf producers. Current adopters receive a premium of $5.38/cwt from participation in a certified preconditioning program, while nonadopters would realize $5.17/cwt by adopting certification. Hedonic model values range from $0.52/cwt to $4.32/cwt, for similar or identical preconditioning programs.
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April, 2014

Value of Genetic Information for Management and Selection of Feedlot Cattle

By: Thompson, Nathanael M.; DeVuyst, Eric A.; Brorsen, B. Wade; Lusk, Jayson L.
We estimate the value of using information from genetic marker panels for seven economically relevant feedlot cattle traits. The values of using genetic information to sort cattle by optimal days-on-feed are less than $1/head for each of the traits evaluated. However, the values associated with using genetic information to select cattle for placement are as much as $38/head. The most economically relevant genetic traits are average daily gain and marbling. It would not be profitable at the current testing cost of $38/head to sort cattle by optimal days-on-feed, but it could be profitable to use the genetic tests for breeding cattle selection.
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April, 2012

Determinants of Price Differentials in Oklahoma Value-Added Feeder Cattle Auctions

By: Williams, Galen S.; Raper, Kellie Curry; DeVuyst, Eric A.; Peel, Derrell S.; McKinney, Doug
Many value-added practices cannot be observed by feeder cattle buyers. Third-party verification can decrease market inefficiency associated with this asymmetric information. We evaluate the effectiveness of a verification program, the Oklahoma Quality Beef Network, in increasing received prices. We estimate the value of verification, weaning, vaccinating, certification and phenotypic traits of feeder cattle at Oklahoma auctions. Results indicate that the OQBN program adds $2.39 to $5.74/cwt. Vaccinating calves adds $1.44/cwt, and weaning calves adds $2.05/cwt. Differential values for lot size, average weight, hide color, frame size, conditioning, Brahman influence, gender and other characteristics are also reported.
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August, 2007

An Economic Analysis of Genetic Information: Leptin Genotyping in Fed Cattle

By: DeVuyst, Eric A.; Bullinger, Jared R.; Bauer, Marc L.; Berg, Paul T.; Larson, Daniel M.
A polymorphism in the leptin gene is associated with fat deposition. Since fed cattle are often priced on a grid that considers yield and quality grades, fat deposition is an important factor in profitability. Using data from 590 crossbred steers and heifers, we simulate carcass traits to various days-on-feed and compute the associated profit under three price grids. Results indicate that leptin genotype does affect value by as much as $48 per head but has little impact on days-on-feed. Given current commercial testing fees of $40-$50 per sample, genotyping of feeder cattle appears to break even at best.
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July, 2001

REPRESENTATIONS OF MULTI-ATTRIBUTE GRAIN QUALITY

By: DeVuyst, Eric A.; Johnson, D. Demcey; Nganje, William E.
Grain quality is typically measured via several attributes. As these attributes vary across shipments and time, grain quality can be described using multivariate probability or frequency distributions. These distributions are important in modeling blending opportunities inherent in various grain shipments. For computational reasons, it is usually necessary to represent these distributions with a small set of discrete points and probabilities. In this analysis, we suggest a representation method based on Gaussian quadrature. This approach maintains the blending opportunities available by preserving moments of the distribution. The Gaussian quadrature method is compared to a more commonly used representation in a barley blending model.
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December, 1999

A GROUP INCENTIVE CONTRACT TO PROMOTE ADOPTION OF BEST MANAGEMENT PRACTICES

By: DeVuyst, Eric A.; Ipe, Viju C.
The control of agricultural nonpoint source pollution is emerging as a priority of state and national pollution control programs. Best management practices (BMPs) are often proposed as a method of control. Many BMPs are perceived by farmers as having economic disadvantages when compared to conventional management systems. In the absence of tougher environmental restrictions on farmer behavior and complete observability of individual farmer actions, it may be necessary to provide economic incentives to encourage farmer adoption of BMPs within environmentally sensitive watersheds. This study investigates the use of a group incentive contract to encourage adoption of BMPs. The idea behind the group incentive contract is to compensate farmers for actual damages due to adoption of BMPs while avoiding moral hazard problems and exploiting the correlated risks that farmers in a watershed face. Simulation results indicate that the majority of the nitrate pollution generated by central Illinois corn growers could eliminated at little or no cost.
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