Page 46 - Azerbaijan State University of Economics

THE JOURNAL OF ECONOMIC SCIENCES: THEORY AND PRACTICE

variation, and correlation coefficients are determined for prices, purchase

costs, and sales revenues associated with each weight class. The expected
price for each of the respective weight classes are determined for the time

periods when cattle are purchased or sold in each scenario. These prices are

entered in the model objective function and contribute to the estimated NR
for each scenario. Relative price risk is indicated by the coefficient of

variation and is determined for each cattle purchase or sale date and weight
category.

Cattle purchase weights for each scenario are set at 575 lb based on
typical beginning weights for stocker cattle in the region. Expected steer gain

per acre while grazing dryland wheat is estimated in 2009 Texas A&M

University AgriLife Extension Crop and Livestock Budgets (AgriLife
Budgets, 2009). The steer gain estimate from the District 1 AgriLife budget

is chosen as representative of the region, as the district includes the

Panhandle. Expected steer gains per acre are estimated by Lust, et.al. (2009)
for dryland wheat and sorghum-sudan. Expected individual steer gains for

dryland wheat and sorghum-sudan are derived from the expected gain per
acre then used to determine the expected sale weights for cattle in the

optimization models. Expected grain yield and price for dryland wheat is
estimated from 2009 Agrilife budgets for dryland wheat in District 1.

Expected forage production for native rangeland and bluestem is

determined from the work of Lust (2008). Expected forage yields are then
transformed to steer gain based on National Research Council (NRC)

nutrient requirements and forage nutrient values. Expected steer gains and
returns are reconciled with Agrilife Budgets for summer stocker grazing.

Labor and equipment costs associated with each scenario are determined
from AgriLife budgets for dryland wheat, dryland sorghum-sudan grazing,

and summer and winter stocker grazing budgets.

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