Overprice on purchase of replacement cattle and genetic group as variables of economic result in feedlot operations

Abstract

Animal production systems and agribusiness Full-length research article Overprice on purchase of replacement cattle and genetic group as variables of economic result in feedlot operations ABSTRACT-The objective of this study was to analyze the economic result of feedlot operation for three genetic groups of cattle (Nellore, Nellore crossing with other Zebuine breeds, and Dairy crossbred) as a function of the overprice on the purchase price of cattle to be feedlot-finished. The study involved data of 57,589 animals divided into 709 lots originating from operation cycles from March to December 2016. Lots were considered replicates, and gross margin per animal was considered the economic result. Data pertaining to each lot, overprice, and gross margin were analyzed by regression, with mathematical models developed for each genetic group. After significance tests were applied, simple linear models were adopted for all studied groups. To check the equality or lack thereof of the three regression models generated, we used a modelidentity test, which revealed that the model for Nellore animals was different from that used for Dairy crossbreds. The model generated for Nellore crossing with other Zebuine breeds did not differ from the models for Nellore or Dairy crossbreds, i.e., Nellore crossing with other Zebuine breeds may be grouped as a single model together with the Nellore group or with the Dairy-crossbred group. The estimates generated from the three individualized models suggest that the purchase of the feeder (unfinished) cattle for the Dairy crossbred, Nellore crossing with other Zebuine breeds, and Nellore groups, with an overprice starting at 1.19, 1.21, and 1.27, respectively, will result in negative gross margins. Thus, the overprice at purchase may compromise the economic result of feedlot operation, and more-efficient animals may allow for a greater overprice on the purchase in the operation, with a positive gross margin.