Cow-Calf vs Stocker Operations: An
Identification of Leverage Points in
North Florida Beef Cattle Systems
David Zimet, Christina H. Gladwin, and Thomas Spreen*
Paper prepared for the Third Annual Farming Systems Research Symposium,
Manhattan, Kansas, October 31 November 2, 1983.
*David Zimet is a research assistant and Ph.D. candidate, Christina H.
Gladwin is an assistant professor, and Thomas Spreen is an associate
professor in the Food and Resource Economics Department, Institute of
Food and Agricultural Sciences, University of Florida, Gainesville,
FL. The authors are grateful for the help and advice of Lawrence
Halsey, extension director of Jefferson County, the farmers in Jefferson
who gratiously gave their time and effort to this project, and for funds
provided by National Science Foundation grant BNS8218894 awarded to
Christina Gladwin and by the Institute of Food and Agricultural Science,
at the University of Florida.
Cow-Calf vs. Stocker Operations: An
Identification of Leverage Points in
North Florida Beef Cattle Systems
David Zimet, Christina H. Gladwin, and Thomas Spreen
Florida agriculture, it is felt by some including the state legis-
lature, can benefit from an increase in the pounds of beef sold by
Florida cattlemen and the increased finishing and slaughter of cattle in
Florida. The present study, a necessary first step towards a Florida
farming systems project focused on beef cattle, was initiated to evalu-
ate the beef production potential of cattlemen and farmers in North-West
Florida, an area considered particularly important because of its abil-
ity to support cool season pastures and produce other crops used as
cattle feed. Given these goals, the research focused on farmers' beef
cattle systems and decisions made by producers. Two decisions were
modeled via hierarchical decision models (HDM's). The first was the
decision of whether or not to impose controlled breeding or a limited
breeding season on the cow herd. The second was the decision between
holding stocker calves and backgrounding, i.e. holding calves from 400-
500 pounds until they reach weights on the threshold of a finishing
program (700 to 800 lbs.), or holding a brood cow herd. The model of
the second decision identifies scale of operation and capital to buy
calves, the availability of temporary winter pasture, the riskiness of a
stocker operation, and the need for cash (from calves) throughout the
year to be the key factors in making the cow/calf vs. stocker operation
decision. They are thus the important leverage points in any attempt to
improve traditional beef cattle systems in North Florida. The paper
thus shows the usefulness of hierarchical decision models by an FSR&D
team attempting to identify and categorize leverage points in the
farming system as being amenable to manipulation by either a FSR/E team
designing new technology or an FSIP team proposing structural changes.
Cow-Calf vs. Stocker Operations: An Identification of
Leverage Points in North Florida Beef Cattle Systems
Farming Systems Research and Development (FSR&D) has been charac-
terized as a holistic approach to improving the standard of living of
the farm family. It treats the farm family as a simultaneous consump-
tion and production unit. The family consumes farm products as well as
using income generated from those products for purchasing inputs and
consumption items (Norman and Gilbert, 1982). In production, the family
is treated as the main source of labor and management. Exactly how the
farming systems philosophy is applied in a project, however, depends not
only upon actual farm circumstances in a region but also upon the
approach to applied work of the professional practioners involved.
To date, two approaches have surfaced as predominant schools of
thought. They are Farming Systems Research and Extension (FSR/E) and
Farming Systems Infrastructure and Policy (FSIP).
FSIP is more 'macro' than FSR/E. Since it deals with policy, the
variables it treats are mainly outside the farm gate and involve
more social scientists and economists than agro-biological scien-
tists . as a means of more accurately predicting farmer
responses to different policy stimuli.
FSR/E is more 'micro' in scope and deals mostly with conditions
inside the farm gate. Because it is concerned with technology
generation, evaluation and delivery, more agro-biological scien-
tists are involved and methodology is heavy in on-farm biological
research with relatively little time devoted to surveys.
Taken together . FSR/E and FSIP comprise a complete development
concept termed here FSR&D (Hildebrand and Waugh, 1983).
Although the differences between the two approaches are clear, they
share some similarities. Both approaches have the primary goal of
FSR&D, to improve the well-being of the farm family. To attain this
goal both use survey techniques to ascertain the on farm status quo as
regards production/management techniques. This situation is viewed by
both as the starting point for improvement. Both FSR/E and FSIP iden-
tify the farmers' perception of their problems as well as the "major
points of leverage" (Collinson, 1982, p. 22) for intervention by the
FSR&D multidisciplinary teams. The "points of leverage" are interven-
tion points in the system which the team believes can be manipulated so
as to better exploit the biological potential of the system in a way
compatible with the goals and resources of the farmer.
The points of leverage must be categorized (FSR/E vs. FSIP) as well
as identified. Categorizing the points of leverage is necessary in
order to promote effective and efficient problem resolution. More
specifically, if a problem at root is structural, i.e., leading to
structural change in agriculture, an FSR/E approach will not resolve it,
but can only resolve the satellite, technical problems. Because an FSIP
approach can deal with a structural problem, it is necessary to know
where the FSIP and FSR/E teams should put their efforts. Furthermore,
the identification and categorization should occur at the "ex-ante
evaluation" (Collinson, 1982) or diagnostic stage rather than at the
"ex-post evaluation" stage in order to be more efficient.
The distinction between FSIP and FSR/E is not the only focus of
debate that has emerged in the FSR&D literature. Recent debates have
also focused on the use of intensive or extensive surveys for identi-
fication of points of leverage as well as seasonal constraints, tradi-
tional production strategies, and socio-economic factors. The sondeo as
promoted by Hildebrand is the most salient example of the latter and the
system used by ICRISAT exemplifies the former (Hildebrand, 1981; Ryan,
1977). CIMMYT's use of an initial informal survey and a follow-up
formal survey takes a middle ground (Winkelman and Moscardi, 1982;
Collinson, 1982: 21-25). In terms of cost, there is little difference
between ICRISAT's intensive surveys and CIMMYT's extensive surveys
(Mclntire, 1983). Both kinds of survey approaches are probably much
costlier, however, than a sondeo (Hildebrand, personal communication).
A modification of the sondeo methodology to more closely approach
Collinson's use of exploratory and verification surveys is what is
promoted here. Unlike the CIMMYT approach, however, which focuses on
factual data regarding technical aspects of production, we believe it is
the understanding of the farmer--what motivates him and how he perceives
his problems, environment, and farming system--that is the critical
aspect of attaining the goal of improving the standard of living of
farmers. A method of analysis which is compatible with the modification
of the sondeo to approach the intensity of the CIMMYT method and which
can also be used to identify and categorize points of leverage is use of
hiearchical decision models (HDMs) (Gladwin, 1976, 1979, 1983; Franzel,
The purpose of this paper is therefore twofold. First, we will
show how to categorize FSIP vs. FSR/E points of leverage within a par-
ticular farming system, the beef cattle farming system in Jefferson
County, N. Florida, at the diagnostic phase of a farming systems pro-
ject. Again, categorization of points of leverage is important because
it is necessary to allocate the resources of personnel and funds to
FSR/E and FSIP teams so that farmers' problems can be solved in a cost-
effective way. Second, we will demonstrate the usefulness of hierarchi-
cal decision models at the diagnostic stage of a farming systems project
by modeling farmers' decisions as regards beef cattle production. As
will be seen, the main limiting factor to increasing the occurence of a
potentially more profitable method of production is scale of opera-
tion. Scale in this case is a structural factor amenable to policy
change only by a policy-oriented FSIP approach. FSR/E interventions
will be much less important for N. Florida beef cattle producers than
FSIP interventions, in this case.
THE PRODUCTION PROBLEM
Florida has a large beef cattle subsector. A high proportion of
the calves born in the state, however, are shipped out of state for
backgrounding, finishing, and slaughter. Ultimately, most of the beef
consumed in the state is shipped-in from other states. Therefore, in
1982, the Florida legislature made a special allocation to the Institute
of Food and Agricultural Sciences (IFAS) to study the Florida beef
cattle industry. The focus was to find ways to increase the pounds of
beef sold by Florida cattlemen and consider the feasibility of increased
finishing and slaughter of cattle in Florida.
In the southern part of the state, operations which produce calves
and sell them g-Ibh immediately after weaning predominate. (Herds of
this type are henceforth called cow/calf herds.) The calves are gener-
ally born in the spring and are sold in late fall or early winter. The
brood cows are maintained over the winter. The calving and sales occur
when they do because soil and climatic conditions prevent the production
of sufficient quantities of the high quality cool weather forages which
would permit the calves to make low-cost average daily gains over the
In comparison, the cool weather forages can be produced in North
Florida, especially in the Panhandle. North Florida, however, does not
"background" (i.e. bring them from weights of 400-500 Ibs to 700-800
lbs.) as many calves as it potentially could. Some of the reasons for
the divergence of potential and actual production are:
1. Weak market linkages--South Florida producers usually deal
directly with out-of-state backgrounders and markets;
2. The high capital requirement for backgrounding a sufficient
number of calves to make backgrounding worthwhile;
3. Lack of finish to slaughter facilities in North Florida; and
4. The competition between brood cows and stocker calves in North
Florida for high quality forage.
In keeping with the goals of the state legislature, it was decided
to investigate the potential for backgrounding more calves in North and
West Florida. Toward this goal, work in Jefferson County, North
Florida, was initiated. It was decided to develop an open-ended ques-
tionnaire so as to obtain, in the farmers' own words, knowledge of
farmers' goals and constraints and problems limiting adoption/adaptation
of the beef production "package." In order to ensure that the "right"
questions were asked in the questionnaire, several weeks were spent in
the field talking to farmers, county extension personnel, and other
experts. In addition, discussions were held with University of Florida
-staff and faculty. A preliminary questionnaire was developed and then
tested in the field. This questionnaire was revised based upon further
discussion with experts and the test experience.
The Study Area
Jefferson County, Florida, is located in North Florida, bordered on
the north by Georgia and the south by the Gulf of Mexico. It encom-
passes approximately 605 square miles of which about 40% is in commer-
cial crop and livestock production (excluding timber); its 1980 popula-
tion was about 10,000. The northern part of the county is rolling crop,
range, and forest land while the southern part is low, swampy, and
supports little commercial farming.
In Jefferson County, cattle operations are an important aspect of
agricultural activities in that county. Most of the cattle sold (in
terms of numbers or pounds) are sold by large producers. The emphasis
of the survey was on smaller producers (Table 1). The survey sample
does not accurately reflect the county in terms of the average number of
animals per producer in the county, but it is fairly accurate in
describing what is done by the average or median producer in the
county. In addition to the 28 beef producers interviewed, two former
beef producers were interviewed.
Agroclimatic Conditions in Jefferson County
The soils of the northern part of Jefferson County contain a cer-
tain amount of clay. (This is also true for an entire strip of the
Panhandle along the Georgia border. In terms of soils the region is
more a part of Georgia than a part of Florida.) The clay enhances the
moisture retention of the soil which in turn permits the planting or
seeding of cool weather crops in September and October. This is a key
aspect of the North Florida livestock production pattern because a
series of cool weather pastures and forages--rye, ryegrass, oats and
clover--can be planted and grazed. Frequently these crops are seeded in
row crop fields after the latter have been harvested. Another fre-
quently used planting technique is to over-seed permanent pasture with
winter and early spring pasture (henceforth called winter pasture).
Another important feature of the winter pasture seeding is that often
crops are planted in conjunction with each other--ryegrass with oats,
rye with ryegrass, rye with clover, etc. This method of diversifica-
tion, because of different moisture and temperature tolerances of the
crops, affords some risk protection against crop failure.. Also, if
inoculated, the clover reduces the chemical nitrogen requirement. No
matter what the specific method of seeding and the specific crop combin-
ation used, the objective of the producers is to "keep things green year
round" so as to minimize the purchase of feed and fiber.
In sum, because of the combination of soil and climate, high qual-
ity winter pastures can be grown in Jefferson County (and in the entire
Panhandle). These pastures permit good maintenance of brood cows over
the winter. They also permit backgrounding of weanlings over the
winter. Stockers of the winter backgrounding program can then be sold
in the spring. Indeed, because of this situation there are two board
sales held in Jefferson County--one in Monticello and the other in
Waukeenah--in early May.
Crops in the Beef Cattle System
In terms of acres the size of operation varies considerably; the
average size is 815.8 acres with a range 23-8,300 acres. Not surpris-
ingly, this is somewhat larger than the average acreage for all farms in
Jefferson County as reported in the 1978 Census of Agriculture (506
acres) since an average farm which produces beef, whether or not it does
so in conjunction with commercial crops, tends to be larger than the
average farm which produces no beef. Furthermore, if the two largest
farms are deleted from the sample the average would be 457.7.
Only four of eight farms with large herds (more than 150 head) do
not also produce crops for commercial purposes. In fact, both cattle
and commercial crops are produced on 13 of the 28 farming operations.1
The 13 beef producers producing crops commercially have an average of
165 acres in commercial crops (with a range of 5-900 acres), an average
145.8 acres (with a range of 12-400 acres) in summer or permanent pas-
ture, and an average of 207.9 acres (with a range of 10-645 acres) in
winter pasture. The land in winter pasture, as previously noted, is
often devoted to other crops in the spring and summer so that total
crop-acres exceed the total of physical acres available. Several pro-
ducers, however, let their winter pasture turn to crab grass for grazing
during the summer.
Fifteen of the beef producers surveyed (54%) produce no commercial
crops; these "livestock only" or exclusively beef operations are hence-
forth distinguished from so-called "mixed" operations. (Some, however,
rent cropland to other producers.) These farmers, on average, have
228.8 acres in permanent pasture (with a range of 0-1,300 acres) and
110.0 acres in winter pasture (with a range of 0-500 acres). Two of the
four producers who have no winter pasture buy hay and one buys feed as
well to carry their herds through the winter. The other two make hay
and buy feed for this purpose. The calves of the producer with no
permanent pasture are fed corn and feed during the summer and graze corn
stubble in the early fall.
The major difference between mixed and livestock only operations is
that the production of commercial crops does seem to cause another
ISee footnote c, Table 1.
difference in cropping pattern. The mixed operations have, on average,
a greater amount of land in winter pasture than they do in summer pas-
ture. This increases the total production of the cropland which is used
for winter pastures. The situation of the producers who produce only
beef is reversed. There is another important difference. Only four of
the 15 livestock operations rent land. Of these four, two rent all land
for the entire operation. Nine of the 13 mixed operations, however,
rent land. Although data are not available, it appears that much of the
rented land is used for crops, not for grazing. In summary, 69 percent
of the producers of commercial crops rent land, while only 27 percent of
those producing only beef rent land.
The distribution of herd size by type of operation is presented in
Table 1. Types of operations include so-called cow/calf, stocker, and
cow/calf with stocker operations. A cow/calf operation has a brood cow
herd and the calves produced are sold upon weaning or soon afterwards.
The calves usually weigh just under 400 pounds. Stocker calves are
those that have been weaned and are raised to weights between 700 and
800 pounds. If there is no brood cow herd, the calves are purchased.
The process of raising stockers is called "backgrounding." A cow/calf
with stocker operation is one which has a brood cow herd and backgrounds
their offspring and/or purchased calves. The average number of brood
cows owned by all cow/calf producers surveyed is approximately 102 cows
(with a range of 14 to 390 head). Mixed operations have 93 cows
(ranging from 14 to 350 head) compared to livestock only operations with
average inventories of 111 cows (ranging from 15 to 390 head). Thus,
livestock only operations have approximately 20 percent more breeding
stock than mixed operations.
Focusing on those operations that stocker, the average number of
stocker calves produced annually by mixed operations with stockers
(either raised and/or purchased) are greater, on average, than livestock
only operations. Mixed stocker operations produce an average 353 head
(ranging from 35 to 896 head) versus 314 head (ranging from 180 to 470)
from livestock only stocker operations. If the largest herd is
excluded, the average of the mixed stocker operations drops to 275
head. The average for all who produce stockers is 342 head (range of 35
to 896 head). Although stocker operations are clearly bigger than
cow/calf operations in this sample (as in the Southeast U.S.), cow/calf
operations outnumber cow/calf with stocker operations which in turn
outnumber stocker only operations, for reasons which are discussed next.
Using Decision Tree Models to Design and Evaluate
Technological Recommendations for Beef Cattle Operations
The information summarized above was synthesized with information
gathered in a more informal way, in order to develop hierarchical deci-
sion tree models of the individual producer's choice of type of opera-
tion, i.e., the cow/calf versus stocker decision. Before this specific
case is presented, however, a short discussion of hierarchical decision
models and their use is given by using another, less complex, decision.
A hierarchical decision model is a technique to identify and place
key decision criteria into a logical framework, in order to predict
actual historical choices of individuals. The criteria (denoted by
< >) form questions which can be answered by either a yes or a no, each
response leading to a different path or branch. The goals or reasons
motivating the decision comprise the first level of criteria. Usually
only one reason or goal is necessary to move on to the constraints, all
of which much be passed, in order to do the activity in question. The
constraints form the second level of criteria. Each branch ultimately
leads to an outcome or choice (denoted by CO ).
How do producers perceive their situation? What do they believe to
be their most important problems, and what are the constraints, from the
producers' point of view, to overcoming them? The answer to these and
related questions are important for the design of successful programs
and projects which are intended to assist the producer. One methodology
which lends itself to answering these questions is the one used for the
present study. The draft questionnaire was designed only after some
time was spent with the producers learning their "language" and gaining
an appreciation for their production systems and problems. After some
revision of the questionnaire, a somewhat formal, open-ended question-
naire which asked questions about management practices was adminis-
tered. Thus insight was gained as to how producers make decisions and
what they "key" on. Such insight is useful not only to policy makers,
but also to those who design programs and projects and those who attempt
to evaluate the effectiveness of same.
The Decision to Adopt Controlled Breeding
One of the elements of the IFAS beef "package" for cow/calf opera-
tions is the use of so-called controlled breeding, i.e., a limited
breeding season of 3-4 months instead of 6-7 months duration. This is a
key recommendation upon which efficient exploitation of other recommen-
dations depend. For example, implantation of growth stimulants depend
upon a short, predictable calving season. Yet a large minority of
producers do not impose a limited breeding season on their herds,
perhaps dooming the entire IFAS "package to failure or at least to
only limited success. Why don't farmers use this basic management
tool? If the reasons were known, could anything be done to improve the
situation? The answer to the latter question depends, of course, upon
the reasons for non-adoption. It is exactly in this type of problem
area where the methodology of HDM's excels.
A decision tree for the imposition of controlled breeding on a
brood cow herd is presented in Figure 1. Each of the criteria is a
factor mentioned by the producers. Indeed, of the 10 producers who
could have used a controlled breeding program but didn't, five stated
that they were satisfied with the present calving rate and saw no need
to improve it. According to another farmer, controlled breeding would
not improve the calving rate. Two producers stated that they did not
have enough pasture to separate bulls and cows. One producer wanted
more consistent cash income throughout the year, while one did not have
the know-how to impose controlled breeding.
Upon reading the decision tree in Figure 1, Collinson's "points of
leverage" can be found amongst the reasons for and constraints against
imposing controlled breeding. Analysis indicates where further work
needs to be done to remove obstacles to more widespread use of con-
trolled breeding. It can also be determined whether more resources need
to be devoted to technology generation by the FSR/E subteam or infra-
structural change by the FSIP subteam.
Examples from the decision to impose controlled breeding show
this. If farmers are not satisfied with their calving rate and are not
sure whether.or not controlled breeding would improve the situation, an
FSR/E program could be set up to experiment with calving rates. As
regards constraints, some producers said that they do not have enough
pasture to keep bulls separate from cows, the basic requirement of
controlled breeding. Both FSR/E and FSIP type activities could improve
the situation. FSR/E activities could aid in research to make pastures
more productive. Research can be conducted to determine optimum pasture
carrying capacities, in terms of pounds of calf sold, when bulls are
kept separately from cows. A possible FSIP-related activity is a pro-
gram to assist farmers in pasture rental. Another possibility is a
bull-rental program whereby a research center or institution rents bulls
to farmers for 90 day periods. Such a program already exists in Alabama
and is being run by the Tuskeegee Institute. Presently a request for
such a project on a limited scale has been presented to Heifer Project
International by Florida A&M University. Obviously, FSR/E and FSIP
activities are complementary: an FSR/E effort coupled with a Tuskeegee
Institute type program could be made to test whether conversion from
open breeding to controlled breeding over a three to four year period
would or would not result in an appreciable loss in calf crop.
The Cow/Calf vs. Stocker Decision
In Florida as in other Southeastern states, raising stockers is
potentially more profitable than owning a cow/calf herd (Ross et al.,
1983). Yet more producers have cow/calf herds than stockers.
Obviously, from these producers' point of view, there are disadvantages
and/or constraints to owning a stocker operation. These are represented
by the first criterion and the criteria on the left hand path of the
tree. Again, these criteria, as well as those on the right hand side,
can be viewed as leverage points capable of being manipulated by the
FSR&D teams, in order to increase the number of stocker operations in N.
The first criterion or leverage point is scale of operation, a
barrier to entry to backgrounding stockers (Criterion 1). Scale is
important because returns per animal are low and marketing costs per
animal, especially hauling animals to and from the farm, are greater,
the fewer the animals. Several farmers claimed that hauling fees with
less than half a truckload of animals (i.e., 25-30 animals) are exces-
sive. The size requirement is translated into a capital constraint by
farmers because a sufficiently large number of calves must be purchased
for a stocker operation to be profitable.
There is another, perhaps more critical, reason that scale of
operation is important. Backgrounding feeder cattle is an intermediate
step in the production of high quality beef. The next step in the
production process is intensive feeding of the animals in a confined
feedlot. Current production practices in feedlots call for lots of
uniformly-sized feeder cattle numbering approximately 40. A back-
grounding operation is expected to market lots of 40 uniformly-sized
cattle. A small producer may find it impossible to produce 40 uniformly
sized cattle. If so, he will probably face a price discount, reducing
the profitability of the backgrounding operation.
There are several things that can be done by an FSIP team to alle-
viate the problem of scale. Through institutional programs, special
loans can be made available to producers who would be willing to back-
ground if they had the capital to purchase sufficient numbers of
calves. Furthermore, a program of cooperative purchase of stockers for
backgrounding and their eventual sale as feeder calves could be devel-
oped. Alternately a more formal cooperative situation could be devised.
The services provided by the cooperative could take several forms,
but the most important would be to serve as a clearinghouse of informa-
tion to allow assembly of uniform lots of weaned feeder cattle. Farmers
with excess land willing to produce high quality forage and others with
feeder cattle presently not able to break the size barrier alone could
be matched. The forage producer would take possession of the animals
but ownership would not change. The forage producer would be paid based
on pounds of weight gain. At the end of the backgrounding period the
cooperative could serve as a bargaining agent for the sale of the cattle
to feedlots. The cooperative could also assist in the acquisition of
sufficient capital, supply of inputs such as fertilizer, seed, and feed
supplement, and in the maintenance of a staff of veterinarians, agrono-
mists, and other specialists to provide technical know-how. Clearly,
the development of cooperatives and the establishment of special loans
fall under the realm of FSIP.
The production of high quality winter forage is another critical
aspect of backgrounding (Criterion 8). It is here that the FSR/E team
has an important role to play since no policy can change this technical
requirement. At present, for example, the North Florida Farming Systems
Project is working with beef producers to establish perrenial peanut
pastures. These pastures are being over-seeded with wheat or rye for
winter grazing (North Florida Farming Systems Team, 1983). By devel-
oping more flexible feed and forage subsystems, FSR/E can be instru-
mental in mitigating the production risks (Criteria 6A and 6B) and
increasing the profitability of holding stockers. Reducing the produc-
tion risks of stockers is important because farmers testify that the
risks of stockers are greater than those of a cow/calf operation. The
greater riskiness of stockers is due not only to the greater fluctuation
in stocker prices than weanling prices but also to the dependence of
stocker weight gain--the critical factor in a successful backgrounding
program--on variable weather conditions.
There are other reasons besides scale, risk, and availability of
winter pasture which inhibit or prevent producers from running stocker
operations. A producer must know how to run a successful backgrounding
operation (Criterion 7). Most producers, especially those from a farm
background, have a reasonable understanding of animal health and nutri-
tion needs. Producers who originally lack this knowledge can obtain it
easily from a number of sources. Marketing know how is another
matter. There are two marketing aspects related to the management of a
stocker herd. First, the right kind of animal must be purchased; and
second, the animal must be sold. The former is critical as animals that
will gain weight efficiently are keys to success. The ability to
purchase such animals has been described as a learned art which is not
just "picked-up." Being able to produce an adequate supply of temporary
winter pasture (Criterion 8) is also critical. If a producer has a
winter backgrounding program he must be able to produce such pasture in
a timely fashion in order to get good weight gains. Thus the producer
must ask himself whether he has enough time, the proper machinery and
equipment, and the know-how to plant combinations of rye, ryegrass, oats
and clover. If he can't do so, he should not do winter backgrounding.
Traded-off against these disadvantages of a stocker operation,
however, are the advantages of greater profitability and greater flexi-
ability. The stocker operator can change the size of his herd, depending
on anticipated market conditions, and available time and pasture,
depending on cash cropping decisions. The cow/calf operator, however,
invests a good deal of time and management in his breeding program,
trying to develop a brood cow herd that does well under the conditions
on his farm. He is therefore reluctant to sell-off part of his breeding
stock in a bad year and decrease herd size, unlike the stocker oper-
ator. Similarly, increasing herd size in the short run is also more
difficult for the cow/calf operator, because finding the "right" brood
cows or raising own heifers of good quality is a long-run proposition.
If a producer has none of the above motivations to run a stocker
operation or if he cannot meet the requirements of such an operation, he
should not background calves. In Figure 2, such producers would pass to
the cow/calf branch (right hand side) of the decision tree.
Like the stocker operation, a cow/calf operation has certain advan-
tages and disadvantages. The major disadvantage is that it is less
profitable than a stocker operation of sufficient size (e.g.> 25
head). In addition, cow/calf operators, more so than stocker operators,
justifiably believe they will lose money for approximately three years
while starting up the operation. While heifers mature, management
experience is gained, and a production system is established, they lose
money. In contrast, stocker operations lose money maybe for two years
while managers gain experience and establish a production system. Thus
Criteria 3 and 9 ask if the producer believes he can sustain such losses
until he eventually earns a profit.
As viewed by the producers interviewed, a cow/calf operation does
have some advantages. Because brood cows are owned for more than a
short time while income is generated from their calves, the cows are
viewed as a form of savings (Criterion 10). They can also serve as
collateral on loans as well as a source of capital. Another advantage
is that the calves can be sold at almost any stage in their development,
whereas stockers should be kept for a certain amount of time until they
reach a profitable weight. Even under the most constrained situation
(i.e., calves are held until weaning and controlled breeding is used),
calves are available for sale during a long three to four month period
as compared to a few weeks for stockers. Further, the potential sale
period of calves when controlled breeding is not imposed is approxi-
mately twice as long. Thus, there is greater potential for more consis-
tent cash income from a cow/calf operation (Criterion 12). Cow/calf
operations, however, are not necessarily profitable. Nor do all pro-
ducers find the advantages of a cow/calf operation to be attractive.
Yet some have brood cow herds, because they think that beef cattle are
the only or least-cost way to use the land and not lose their agricul-
tural tax exemption (Criterion 11).
Results and Summary of Research
Results of fitting this model to a first set of farmers in Jeffer-
son County show that only seven of 23 farmers decide to raise stockers;
whereas 15 farmers decide on a cow/calf herd. (These data match those
of Table 1 because we had insufficient data on three plantation owners
and one farmer, of a total of 11 farmers with stocker herds in Table 1,
to put their data down the tree in Figure 2). Results thus suggest that
limiting factors to potentially-profitable backgrounding operations in
North Florida include:
*scale of operation, or capital to buy a sufficient number of
calves (Criterion 1)
"know-how to run a stocker operation (Criterion 7), and
*riskiness of a stocker operation (Criterion 6), and
"ability to make enough temporary winter pasture to get good gains
on stockers (Criterion 8).
In sum, profit-motivated small producers who do not have the cash or
credit necessary to buy enough calves for backgrounding opt for the
less-risky cow/calf alternative. Producers with enough credit or capi-
tal accumulated to buy enough stockers will do so only if their cow herd
will not suffer from competition with stockers for scarce resources such
as winter pasture. Given these decision criteria, it is understandable
that the traditional beef cattle production system of the limited
resource farmer in North Florida is a cow/calf operation without con-
The case presented shows that an intermediate level of survey
intensity can be used to discover and analyze the farmers' environment
and problems as perceived by the farmers themselves. This perspective
can be analyzed by using hierarchical decision models as a way to iden-
tify leverage points for FSR&D team intervention. These intervention
points can be classified into those in which structural factors pre-
dominate, indicating a greater FSIP effort, and those in which technical
factors predominate, requiring a greater FSR/E effort. When structural
factors are critical, FSR&D teams must present policy makers with new
policies and ideas. For example, increasing pasture productivity by
itself is not going to cause an increase in backgrounding of stocker
calves in North Florida. New policies such as "cooperative stocker
marketing," would have to be in effect before the many small producers
who presently have cow/calf herds would be able to switch to the poten-
tially more profitable stocker operations.
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Table 1. Number of Producers Interviewed by Size and Type of Operation.
Mixed Livestock Only
Herd Size Cow/calf Stocker Cow/calf Cow/calf Stocker Cow/calf
only only with stocker only only with stocker
< 50 3 1 10
100-124 1 1 1 1
S250 1 2 1 1 2
aFor the cow/calf only operations the herd size is determined by the
number of brood cows. For the cow/calf with stocker operations size is
determined by the number of stockers.
bThis group includes one farmer who purchases young dairy bull calves
and raises them to about 600 pounds. He is excluded from discussion
related to brood cow management. It also includes another producer who
is just starting out and is presently raising his potential brood cows.
CThere is one producer who operates a cow/calf herd and a stocker
herd. When necessary he is treated as two producers in this report
since herd management practices differ.
(IMPOSE CONTROLLED BREEDING; DON'Tj
WOULD MORE UNIFORM CALVES IMPROVE YOUR MARKETING SITUATION?
WOULD USE OF CONTROLLED BREEDING IMPROVE CALF MANAGEMENT?
yes (10) I no (10)
WOULD USE OF CONTROLLED BREEDING ENABLE YOU TO SPEND MORE TIME ON OTHER THINGS?
es (2) no (8)
RE YOU DISSATISFIED ITH PRESENT CALVING RATE?
ARE YOU DISSATISFIED WITH PRESENT CALVING RATE?
no (5) :.
DO YOU THINK CONTROLLED BREEDING WOULD IMPROVE CALVING RATE?
DO YOU WANT CASH
.. .- I
INCOME FROM BEEF OPERATION TO BE
CONCENTRATED IN TIME?
yes (16) '- I
DO YOU HAVE THE KNOW-HOW OR WILLINGNESS TO LEARN TO IMPOSE CONTROLLED BREEDING?
yes (15) no (1)
DO YOU HAVE ENOUGH PASTURE TO KEEP BULLS SEPARATE?
yes (13) nn (2)
COULD YOU STAND LOSS IN CALF CROP WHILE CONVERTING FROM OPEN TO CONTROLLED BREEDING?
yes (13) no (0)
The Decision to Impose Controlled Breeding on a Brood Cow Herd.
fSTOCKER OPERATION; COW/CALF OPERATION}
CAN BUY ENOUGH CALVES TO MAKE BACKGROUNDING WORTHWHILE?
yes (12) no (11)
PROFIT FROM STOCKERS c
THAN PROFIT FROM COW/CALF?
-- no (3)
LONG RUN PROFIT
(9) FROM STOCKERS > 0?
yes (3) I
FLEXIBILITY OF STOCKERS> no (0)
FLEXIBILITY OF COW/CALF?
yes rl ) GREAT PROFIT OR LONG
(6) RUN PROFITABILITY WORTH
LOSS IN FLEXIBILITY?
yes (6) i
6A no (0)
RISK OF STOCKER OPERATION >
RISK OF COW/CALF OPERATION?
HAVE STRATEGY TO REDUCE RISK?
yes no (1)
HAVE KNOW-HOW OR WILLINGNESS TO LEARN ABOUT STOCKERS?7
HAVE KNOW-HOW OR WILLINGNESS TO LEARN ABOUT STOCKERS?
yes no (2)
MAKE ENOUGH TEMPORARY WINTER PASTURE?
yes no (2)
LONG RUN PROFIT FROM COW/CALF > 0?
yes (14) no (2)
ARE BROOD COWS COW/CALF ONLY
A GOOD FORM OF FEASIBLE
SAVINGS? A OPERATION?
LIQUID ASSET? n
yes no '
I Cow/calf I Don't
(13) (1) raise
V 12 beef
ARE CALVES A cattle
(3) no (10)
SK 1 11
Figure Cow/calf versus stockbr decision.