Determining the Impacts of Cattle Origin and Ownership Characteristics on Feedlot Performance and Economic Returns

Abstract

The U.S. beef cattle industry is segmented into two broad categories, feeder cattle production and feedlot finishing. In 2016 cattle on feed totaled 10.5 million head, making feedlots an integral step in American beef production (Jones & Edwards 2016). During the transition from feeder production to the feedlot, background information concerning the quality and potential of individual animals is often lost. The lack of information limits the potential to optimize feedlot management strategies. Using data from a large commercial feedlot in the Southern Plains region of the U.S., this research analyzes the impacts of background characteristics on feedlot performance. The background characteristics include origin and ownership status. Results from Mixed Linear Models indicate the custom fed pens perform better than pens owned by the feedlot at times. Differences in origin have a notable impact on the health of cattle on feed. To evaluate economic effects, an Ordered Logit Model estimates the probability that a pen will achieve a defined level of return. Cattle sourced from the country that are custom fed have a higher probability of achieving higher returns. The background characteristics and pen-level observations allow the data to be categorized in distinct groups. Descriptive analysis of close-out pen means confirms general expectations about feedlot performance. Variations of the means offer a unique opportunity to study the volatility of performance across distinct categories.