• TABLE OF CONTENTS
HIDE
 Front Cover
 Title Page
 Table of Contents
 Foreword
 Summary and conclusions
 Resource base
 Benchmark ranches
 Costs and returns
 Land use strategy
 Appendix














Group Title: Virgin Islands of the United States. Agricultural Experiment Station. Virgin Islands Agricultural Experiment Station report
Title: Profitability of beef production in St. Croix, U.S. Virgin Islands
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 Material Information
Title: Profitability of beef production in St. Croix, U.S. Virgin Islands
Series Title: Virgin Islands of the United States. Agricultural Experiment Station. Virgin Islands Agricultural Experiment Station report
Physical Description: iv, 20 p. : ill. ;
Language: English
Creator: Park, William L
Park, Robert L., 1932-
Donor: unknown ( endowment )
Publisher: Virgin Islands Agricultural Experiment Station
Place of Publication: St. Croix
St. Croix
Publication Date: 1974
Copyright Date: 1974
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Table of Contents
    Front Cover
        Front Cover
    Title Page
        Page i
    Table of Contents
        Page ii
    Foreword
        Page iii
    Summary and conclusions
        Page iv
    Resource base
        Page 1
        Page 2
    Benchmark ranches
        Page 3
        Page 4
    Costs and returns
        Page 5
        Page 6
        Page 7
        Page 8
        Page 9
        Page 10
    Land use strategy
        Page 11
        Page 12
    Appendix
        Page 13
        Page 14
        Page 15
        Page 16
        Page 17
        Page 18
        Page 19
        Page 20
Full Text



















































'WIt.. *L'~


ft












Virgin Islands
Agricultural Experiment Station
Report No. 3
June 1974











Profitability of

BEEF PRODUCTION
in St. Croix, U.S. Virgin Islands





















College of the Virgin Islands
Virgin Islands Agricultural Experiment Station
Fenton B. Sands, Director
St. Croix, U.S. Virgin Islands























Foreword ..........................
Summary and Conclusions .............
Resource Base .......................
Climate .......... ...............
Labor and Other Factors ............
Benchmark Ranches ..................
Herd Unit Concept ................
Pasture-Carrying Capacity ...........
Costs and Returns ............... ...
Gross Returns .....................
Sales Estimates ......................
Breakeven Costs and Returns ........
Internal Rate of Return .............
Land Use Strategy ....................
A ppendix ... .......................


COVER PHOTO: Senepol beef cattle on Pangola grass pasture, St. Croix, U.S. Virgin Islands


CONTENTS


Page


iv


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. . . .. . .. ... . . . 3





................................ 11
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. . . .. . . . .. . . . ... 8
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S. . . . . . . . . . . . 1 1
. . . . . . . . . . . .. 11
.... . .. .. . . .. .. ... . 13
















FOREWORD

This report, "Profitability of Beef Production in St. Croix, U.S. Virgin Islands," is one of a
series of feasibility studies sponsored by the newly created Virgin Islands Agricultural Experiment
Station, College of the Virgin Islands. These investigations were financed totally with Federal funds
made available to the Station under the provisions of the Hatch Act, Amended.
Preparation of this report was accomplished by contracting for the services of the following
team of specialists: Dr. William L. Park, Chairman, Department of Agricultural Economics, Rutgers
University, New Brunswick, N.J. and Dr. Robert L. Park, Professor of Animal Science, Brigham
Young University, Provo, Utah. This team conducted the study and wrote the manuscript for this
report.
The objective of these studies was to try to determine the agricultural enterprises, both plant
and animal, that have economic potential on the Virgin Islands. It is my belief that the agricultural
industry must be economically sound in order to be viable.
On the Virgin Islands, agriculture has been on the decline since the early part of the 1960's.
The average number of farms, farmers, and production of agricultural commodities (with the excep-
tion of fluid milk) have all declined at a consistent rate. Among the questions which are upper-
most in the minds of many people are: What factors have been responsible for these declines? Can
these downward trends be stopped and perhaps reversed? What is the future of the agricultural
industry, particularly on St. Croix where 85 percent of the farmland is located? This report on the
profitability of beef production, along with the others, sheds some light on these questions.
These feasibility reports have also revealed the areas where lack of training and education
on the part of the farmers has adversely affected production. These subjects have now become part
of the new program of the V.I. Extension Service. At the same time, the lack of information about
the response of crops and livestock in this environment, which also limits production, has been recog-
nized. These gaps in our knowledge have become the basis for the planned research program of the
V.I. Agricultural Experiment Station. Thus, these studies have given more direction to the ef-
forts of the Extension and research programs of this land-grant institution. More importantly, the
results of these studies are expected to be beneficial to full- and part-time farmers, as well as to
potential investors.
This series of reports rests squarely on the belief that a revival of agriculture would contribute
substantially to the general welfare through increased output of goods and services and by pro-
viding additional employment. Moreover, expanded production and marketing of farm products
could provide greater, and in some cases cheaper, sources of nutritious foods for consumers.
A more fully developed agriculture would complement the major industry-tourism-in two
ways. First, visitors would be pleased to be served local products, especially tropical fruits and veg-
etables, by hotels and restaurants where such products are often not now available. Second-
and perhaps more important-an expanded agriculture would tend to preserve the environment of
exotic tropical islands. Most visitors and some permanent and semi-permanent residents come
to the Virgin Islands to seek this environment. If this attraction is destroyed, the basis of the
major industry of the Islands will be undermined.
The Virgin Islands Agricultural Experiment Station gratefully acknowledges the cooperative
assistance and contributions from many St. Croix farmers; Rudolph Shulterbrandt, Commissioner,
V.I. Department of Agriculture and his staff; and Bennett S. White, Jr., project consultant and
former USDA agricultural economist, now retired.
Fenton B. Sands, Director
March 1974









SUMMARY AND CONCLUSIONS


By U.S. mainland standards, the St. Croix beef
industry is not large. It consists of about 5,000 head
of cattle on 7,000 to 8,000 acres of improved pas-
ture land of varying quality on 64 farms.
The climate is well-suited for beef cattle produc-
tion, but, because of highly variable and frequently
insufficient rainfall, the stocking rate of cattle is
not high-about 4 acres per animal unit.
This report describes two "benchmark" cow-calf
ranches which are used as points of reference to
show the beef industry potentials. Ranch I describes
present economic conditions and production prac-
tices for grass fattening. Ranch II portrays poten-
tial production when sorghum silage is produced
and fed as a supplemental feed.
Neither benchmark farm was capable of gen-
erating sufficient income to cover full production
and land costs. The internal rate of return on non-
land investment for Ranch I (grass only) was
-2%, compared with Ranch II (grass-silage) of
3.9%. Land costs were not included in the calcula-
tion because land prices far exceed the value of
land for farming purposes.
The break-even price for beef on Ranch I is
62.4 cents per pound compared with 50 cents per
pound on Ranch II. The actual price received by
beef producers at the time of the present study was
40 cents per pound.
Beef production appears to be used as part of a
land-use strategy to reduce the holding cost of
land pending its conversion to higher economic
uses. The returns are ample to cover out-of-pocket
expenses and yield a return to management and a
partial return to invested non-land capital.
The present cost-price squeeze is severe enough
that most of the beef industry is not likely generat-
ing enough income to cover full production costs
and a return to management, capital and land. The
reason for this state-of-affairs is partly production-
oriented and partly market-oriented.
On the production side, carrying capacity of the
land can be substantially improved by raising sor-
ghum silage as a supplemental feed for use during


the dry season. Brush control as presently practiced
appears to be expensive. New methods-possibly
herbicides-are needed to reduce such costs. Fenc-
ing costs also appear relatively high. New combina-
tions of materials need to be investigated if any
large acreage is to fenced in. Supplemental feed
sources also need to be investigated.
For the most part, the St. Croix beef industry in
the Virgin Islands is producing feeder quality beef
for slaughter to serve relatively low-income con-
sumers. Carcass quality is "standard" or "low-
good" and does not effectively compete in the high
quality market, that is, U.S. mainland beef im-
ported to the Islands. In essence, the Virgin Islands,
industry is supplying feeder quality beef to native
consumers in competition with feedlot-quality beef
from the U.S. mainland.
The usual higher price for feeder animals in rela-
tion to fat stock in the U.S. mainland is not avail-
able on St. Croix because of the lack of a low-cost
feed supply which is necessary for developing a
feedlot fattening industry. Feedlot fattening is
necessary to raise the grade of animals to U.S.
"good" or "choice"-grades that command higher
prices. Consequently, a low-cost feed supply for fat-
tening purposes is necessary, else the cost-price
squeeze is likely to continue.
Land use strategy is profoundly important to the
beef cattle industry. Today, the value of range-
land is always substantially greater than its use for
agriculture. Beef production under such conditions
is justified, and should be encouraged as a means
of reducing the cost of holding land over time
pending its development for higher economic uses.
Our data indicate that well-run operations can
cover out-of-pocket costs which include repairs and
maintenance of facilities and management income.
The function served by the beef cattle industry in
the U.S. Virgin Islands-either in its own right as
part of a land-holding strategy, or as a source of
protein for low-income families-is a valuable and
productive one and measures should be taken to
assure its continuance and viability.














The Profitability of Beef Production

in St. Croix, U.S. Virgin Islands

by


William L. Park and Robert L. Park


The Virgin Islands were once known as the
"Garden of the West Indies." The well-tended
farms and agricultural industries have had a long
history of excellent productivity. Today the sugar
and cotton operations are quiet and farming gen-
erally is in a depressed state. The number of farms
declined from 466 in 1964 to 212 in 1970-a drop
of more than 50 percent. Those farms reporting
grazing land dropped even faster than the aver-
age--64 percent; land used for grazing declined
from 19,611 acres to 7,583 over the same period.
At one time a major part of the 84 square miles
of St. Croix was under some form of cultivation-
mostly sugarcane. The cane operations of the
Virgin Islands Corporation ceased with the 1965-
66 crop year. Many people supposed that the sugar
land could be easily converted to a local beef or
dairy industry. Genuine attempts have been made
to bring that goal to a reality, but with mixed suc-
cess. Today there are several well-run, apparently
successful, beef ranches on St. Croix, but large land
areas that could support pasture or other feed pro-
duction are sitting idle.
By U.S. mainland standards, the beef industry
in the Virgin Islands is very small. Yet there are
those who see a need for a larger local food source
inasmuch as nearly 95 percent of the V.I. livestock
food supply is imported. In 1964, it was reported
that there were 5,975 head of beef cattle and calves
on St. Croix, where most of the industry is located.'
At present, there are approximately 5,000 head of
beef cattle on St. Croix, 4,095 of which are on
farms with 100 head or more (Table 1).
Coincident with the declining agriculture in the
Virgin Islands, demands for food have increased

'Survey by R. L. Park, 0. Skov, and J. Fuertes,
Federal Agricultural Experiment Station, USDA, St.
Croix, Second Conference on Agriculture, V. I. Dept. of
Agriculture.


Table 1L-Size of beef herds on St. Croix,
U.S. Virgin Islands, 1973

Number Number Average
Herd size of farms of cattle herd size
500 and over --- 2 2,060 1,030
300 to 499 ------- 2 875 438
100 to 299 -------- 7 1,160 166
20 to 99 ---------- 17 635 37
Less than 20 ------... 36 280 8

Total 64 5,010 78

Not all of the small farms were surveyed, but this
estimate is quite accurate when compared to surveys in
1964 and 1969.

markedly. The population of the Virgin Islands
increased from 49,742 in 1965 to 85,000 in 1972,
an 81 percent increase.2 Food demands for tourism
have also increased. Tourist expenditures were es-
timated at $54 million during 1965 compared to
$109 million during 1972. Much of the increased
expenditure was for food which was not, and is not,
available locally.
The major objective of this study was to deter-
mine the costs, returns and economic feasibility of
beef production in the Virgin Islands with primary
emphasis on St. Croix. Sub-objectives were (1) to
identify and define "benchmark" production units
that reflect Virgin Islands conditions, (2) to de-
termine costs and returns to such benchmark units,
and (3) to determine the potential profitability of
beef production under alternative sets of conditions.

RESOURCE BASE
In 1964, 19,000 acres were reported as pasture in
the Virgin Islands. By 1970, the reported figure was

'Virgin Islands Department of Commerce. The growth
rate seems to have slowed recently, however.








down to 7,583 acres-a 61 percent drop. The
amount of potential pasture is substantial and is
available without extensive development cost, pro-
vided economic incentives exist for such use.
Today, it is estimated that between 7,000 and
8,000 acres of improved pasture are in use by beef
producers. As of July 1973, the four largest ranches
had about 6,100 acres of pasture. Beef production
areas on St. Croix are located on the southeast
central part of the island and in the narrow moun-
tain valleys in the northwest. Potential crop or pas-
ture land of a few thousand acres exists in the
southcentral area.
It is evident that there is not enough land avail-
able for a large beef industry; therefore, it must
operate at a smaller scale than might otherwise
prevail.
Factors external to agriculture have exerted a
major influence on land use on St. Croix. First,
*the population of St. Croix increased from 49,700
in 1965 to 85,000 in 1972 and generated a strong
demand for land for housing and cormnercial cen-
ters which was not provided by existing population
centers. It appears that housing developments for
the most part have not been placed on the prime
farmland, but the expectations of development
have bid the value of farm lands substantially
above their farm value. Second, road improvements
and auto travel have placed virtually every part of
the island within the housing demand zone. Third,
industrial demands for land are increasing. And
finally, it is becoming increasingly difficult to find
competent farm workers at wage rates that make
it possible for the enterprise to survive. There is also
some evidence that tenure patterns have influenced
the development of the lands for agriculture use.

Climate
In general, the climate on St. Croix is favorable
to beef production. Temperatures are mild and
well within the needed range. Rainfall averages
about 43 inches in the beef production areas (fig.
1), but it varies considerably from year to year
and from one part of the island to another. Some
parts of the eastern end of the island are quite dry
and support desert plants, while the mountains in
the northwest support a rain forest. There is a quite
predictable wet season from August to November,
4 which the aer-p t demand bal-

2aN


Figure 1. Average Annual Rainfall, Selected Weather
Stations St. Croix, U.S. Virgin Islands, Long term
Normal Rates. Source: U.S. Weather Bureau, chart
by the author.

ance is quite favorable.3 In the remaining months,
moisture is insufficient to maintain continued plant
growth. The island is generally free from the full
force of the most violent storms that spawn in the
Caribbean, but it occasionally receives large
amounts of rainfall during short periods of time,
which contribute to the instability of the rainfall
pattern.

Labor and Other Factors
There is a social stigma associated with agricul-
tural labor, and as a consequence, if a man can
find employment elsewhere he usually will do so.
Many of the farmworkers on St. Croix are not
Cruzans but are "green carders" from other Carib-
bean islands not under U.S. jurisdiction. The labor
market in which agriculture competes is strongly
influenced by the higher rates paid by large indus-
trial concerns.
Supplies, equipment and production inputs,
though generally available, are much more difficult
to procure than in large established agricultural
areas. Since St. Croix is a small island, such items
must be imported and at times there are aggravat-
ing delays. Moreover, costs are high relative to
those of the U.S. mainland.
There is a government-operated slaughterhouse
on St. Croix with sufficient capacity to handle the

"Martyn Bowden, "Water Balance on a Dry Island,"
Geography Pub. No. 6, Dartmouth, 1968.














production. Because of the smallness of the indus-
try, the market system is quite simple and generally
adequate to move the beef from the ranch to the
local consumer.

BENCHMARK RANCHES

The authors personally surveyed large and small
ranchers to determine present practices and input-
output relationships. These ranchers control about
75 percent of the cattle on St. Croix. As a result
of this survey, which was supplemented by the
judgment of livestock specialists familiar with Vir-
gin Islands conditions, two "benchmark" ranches
were identified as points of reference to show the
beef industry potentials. Note that neither bench-
mark ranch describes any one actual unit in all
respects.
Benchmark Ranch I represents present practices
and input-output relationships. It depends totally
upon grass as a source of nutrients for the animals.
It is a cow-calf operation under which the calves
are weaned at about 7V/ months at 550 lbs. and are
sold grass-fat for slaughter at 14 months of age and
should weigh from 750 to 900 lbs.
Benchmark Ranch II represents potential condi-
tions. Grazing pasture is supplemented by the pro-
duction of sorghum silage thereby assuring greater
utilization of grass during the wet season and mak-
ing it feasible to efficiently carry feed produced dur-
ing the wet season into the dry.
In both models, the ranch is defined as having
1,000 acres of productive land. Ranch I has 1,000
acres of pasture; Ranch II has 800 acres of pas-
ture and 200 acres of sorghum. Ranch I has 443
head of stock and Ranch II 754 head; the num-
ber of acres per animal unit are 4.0 and 3.1 re-
spectively.' Basic specifications for the benchmark
ranches are set forth in Table 2; other details are
specified in the cost tables which follow.

Herd Unit Concept

The concept of a herd unit (HU), as opposed
to the traditional animal unit, was developed to
facilitate the sensitivity analysis of the break-even

'Some of the ranchers were feeding 1 lb. of grain per
100 lbs. of body weight to some of the young stock. The
prevailing practice seems to be to fatten on grass unless
severe drought indicates a supplement is needed.


Table 2-Specifications for benchmark ranches, beef
cow-calf operations, St. Croix, 1973

Ranch I Ranch II
Item (grazing) (grazing-
silage)

Total acres ----------------- 1,000 1,000
Pasture ------------------- 1,000 800
Sorghum ------------------- 200
Acres/animal unit ------------- 4.0 3.1
Number of head --------------- 443 754
Number of animal units -------- 249 325
Calving percentage ------------ 85 90
Brood cow replacement percentage 20 20
Cow-sire ratio ---------------- 25:1 25:1
Death-loss percentage ---------- 2 2
Weaning age----------------- 7 mos 71/ mos
Weight at weaning------------- 550 lbs 550 lbs
Sale age ---------------------- 14 mos 14 mos
Weight at time of sale:
Cull cows ------------------1,100 lbs 1,100 lbs
Heifers and young bulls ------ 850 lbs 850 lbs
Sale price:
Cull cows------ ----- 30S lb 30# lb
Heifers and young bulls ------ 400 lb 40t lb
Tax rate ---------------------$2/acre $2/acre
Wage rate- ----------- $100/wk $100/wk
Prerequisites -------------- $100/mo $100/mo
Interest rate ---------- 7Y/% 7/2%



points under alternative sets of conditions. The
expected herd composition is specified by using
calving percentage, cow-bull ratio, replacement per-
centage, length of time in the herd, and the num-
ber of brood cows.
Each component of the herd is given a weight
proportionate to the number in the herd in rela-
tion to the number of cows with suckling calves. For
example, if there are 100 cows with calves in the
herd and 90 heifers and young bulls, the cows and
calves each receive a weight of 1.0 and the heifers
and bulls each receive a weight of 0.9 (Table 3).
The herd unit is expressed in lbs. of TDN s re-
quired by the animals during a year. A nursing cow
needs 4,490 lbs. while a sire needs nearly 6,000 lbs.

'Total Digestible Nutrients (TDN) as reported in
United States-Canadian Tables of Feed Consumption
and Nutrients Requirements of Beef Cattle, National
Academy of Sciences, 1969-70.








Only a portion of a sire's requirements is assigned
to a HU (Table 3).
The carrying capacity of land is determined by
dividing the HU value (12,950 for Ranch I)6 into
the available nutrients produced. The resulting
number of HITs can then be extrapolated to yield
the size of the herd and the number of animals in
each component of the herd. The reverse process
is also useful. Given the number of HU's, nutrient
requirements and acreages can be determined.

Pasture-Carrying Capacity
The principal pasture plant on St. Croix is
Guinea grass; lesser ones are hurricane and
Pangola grasses. Hurricane grass is a lower yielder
than the others and tends to prevail in the drier
areas or where other grasses have been over-grazed.
According to local ranchers, Pangola grass yields
about the same as Guinea grass under stressed con-

*The TDN requirements for the HU on Ranch I is
different from Ranch II because the assumed calving
percentage is different. Ranch II has proportionately
more calves and young stock than Ranch I thereby
giving a lower TDN requirement.


editions but responds to fertilizer when sufficient
moisture is available.
The number of acres needed to support a cow
and calf varies from place to place on the island
in response to the availability of moisture. It typ-
ically requires about 4.0 acres to support an animal
unit if no supplemental feed is provided. One ranch
was able to maintain pasture balance with as few
as 2.3 acres per animal unit. Another was able to
achieve 3.8 with some supplemental feeding of the
young stock. Most of the cattle were being handled
at rates of 4.0 to 4.6 acres/AU. If a pasture can be
maintained at 4.0 acres/AU, the TDN production
per acre is about 1,475 lbs. At this rate, a 1,000-
acre ranch could support 113.9 herd units or 443
head under Ranch I conditions (Table 4).
A feed supplement, of course, increases the utili-
zation of grass during the season of ample rainfall.
Standing hay is one way of carrying nutrients into
the season of insufficient moisture, but at the cost
of most of the nutrients. This relationship is il-
lustrated in Figure 2. The surplus nutrients usually
available from May to December are large relative
to the February-April deficit. Figure 3 illustrates


Table L-Specifications of a herd unit, beef cow-calf operation, St. Croix, 1973

Number Percent Annual lbs. of TDN required
Herd component of of Adjusted for
head total Base 2% deathloss

Ranch I: Number Percent ..---- Pounds......
Nursing cows ------------------------- -------- 1.0 26.0 4,490 4,445
Calves ----------------------------------------- 1.0 26.0 1,825 1,807
Dry cows or replacements --------------------- 0.9 23.0 2,464 2,439
Heifers and bulls --------------------------------- .9 23.0 3,843 3,805
Sires ------------------------------------------ 0.08 2.0 461 456
Total --------------------------------- 3.88 100.0 13,083 12,952
(1.0 HU = 12,950 lbs. TDN)
(1.0 HU = 2.2 animal units)
Ranch II:
Nursing cows ------------------------------------- 1.0 26.5 4,490 4,445
Calves - -- ------------- 1.0 26.5 1,825 1,807
Dry cows or replacements -------------------------- 0.8 21.2 2,190 2,168
Heifers and bulls ------------- 0.9 23.9 3,843 3,805
Sires ------------------------------------------ 0.07 1.9 403 399
Total ------------------ -------- 3.77 100.0 12,751 12,624
(1.0 HU = 12,620 lbs. TDN)
(1.0 HU = 2.1 animal units)

Cow and calf = 1.0 AU; dry cow or yearling = 0.6 AU; sires = 1.2 AU.
















Table 4-Production capacity, 1000-acre cow-cealf beef operation, St. Croix, 1973


Item


Acres available to produce forage -------------------------
Acres in pasture ------------------------------------------------
Acres in sorghum for silage ----------------------
Lbs. of TDN produced per acre (average)
Increased nutrient utilization when supplemental stored feed can be used --
Lbs. of TDN produced per year on pasture ---------------
Tons of silage produced/acre
Tons of silage produced ____-
Percent TDN in sorghum silage
Lbs. of TDN produced per year as silage ----
Total lbs of TDN produced ----- --------------------
No. of herd units supported by forage --------------------------------


Herd composition (herd unit)
Cows, nursing ---------
Calves
Dry cows ------------------------------
Heifers and young bulls
Sires ------------------------

No. of head ---------------------------


Ranch I Ranch II
(grazing) (grazing-silage)


No. animal unit equivalents _____
No. animal units per herd unit ____--
Acres per animal unit ---------


' Total Digestible Nutrients.


the role that silage plays in filling the January-May
deficit. Less surplus is wasted.


Inches or Carrying Capety
B.0 Rainfall Z |Acrs /Ara lnl
Notes The grass growth cycle is
IG.ed 2 weeks behind the
7.0 rainfall cycle to o1 ow For
growth following a rain.

Rainfall Cycle -- f* --
5.0
4.0 Grass Gr-th Cycle __ %
,' i's -'ss "


Notet Due to the loss of nutrients
in I"tanding hay." ft takes a
large surplus of nutrients to
carry the herd through the
0 _ ,a d e f i c i t . .
11- Jan Fe Mar Apr ay Jun ul Aug Sep Oct Nev Dee
F1 F ar Agr Hy J n J I Ag Sep Oft Nov Dfc J n


Grvalabss
Availability


Figure 2. Illustration of stocking strategy which
needs a large surplus forage production in the fall
to carry herd through a spring deficit, U.S. Virgin
Islands.


If the growth cycle approximates the rainfall
cycle as illustrated at levels below 4.0 inches of
rainfall per month, the total grass consumed per
acre increases by about 5.3 percent. The total lbs.
of TDN produced on the 1,000 acres increases from
1.5 to 2.5 million (Table 4). The corresponding
herd supported by the land increases from 443 to
754.
One rancher with experience in growing sorghum
and feeding silage reported that he could con-
sistently yield 23 tons of silage out of the silo per
acre. In years of good rainfall, this level of pro-
duction can be markedly increased. Sorghum silage
is about 14 percent TDN which means that, sor-
ghum produces about 6,300 lbs. of TDN/acre/
year (Table 4).

COSTS AND RETURNS

From a physical point of view, sorghum can in-
crease production capacity from 114 to 195 herd
units. Whether the incremental cost is covered by
the incremental return is another matter.


1,000
1,000

1,475

1,475,000




1,475,000
113.9


114
114
103
103
9

443


1,000
800
200
1,553
5.3%
1,242,400
23
4,600
14
1,288,000
2,530,400
195.4


200
200
160
180
14

754

325
1.6


I
(1.0)
(1.0)
(0.9)
(0.9)
(0.08)

(3.88)


11
(1.0)
(1.0)
(0.8)
(0.9)
(0.07)

(3.77)


Rainfa


I ------ --------------------------


- - - -








_ ^_____rryin@ Ciaacity


3wdtdlct at witth
.O StaniHng HiyV

J F e an r Apr nay Jul Aug Sep Oct d fc
Grms Availa ility

Figure 3 Illustration of stocking strategy which uti-
lizes 90 percent of grass during rainy season and
supplements with silage during dry season, St. Croix,
US. Virgin Islands.

The detailed cost specifications and price esti-
mates are presented in Appendix tables 4 through
7. Labor productivity, wage rates, buildings and
facilities cost, production inputs cost, and machin-
ery cost are at levels presently prevailing in St.
Croix. A full cost technique was used. Wage and
salary estimates include fringe benefits (fica, UI,
WC, etc.) plus perquisites such as a house. Build-
ings and facilities are separately itemized with de-
preciation and repair estimates.
The major production input for Ranch I is for
chemicals for dipping the animals every other week.
Pesticides and fertilizer are additional costs under
Ranch II. Two major facility cost items are dip-
ping vats and associated corrals and fencing. Fenc-
ing under present practices costs $2,300 per mile.
A 1,000-acre ranch divided into ten 100-acre fields
would require 11.25 miles of fence, or a cost of
nearly $26,000.
Present wage rates for beef ranch workers varies
from $70 to $120 a week plus a house. Present prac.
tices would require about three men to operate
1,000 acres in beef production.
Investment, exclusive of land but including cat-
tle, amounted to $151,273 for Ranch I. This is
about $52,000 per worker or $341 per head of
cattle (Table 5). Ranch II is built around 800
acres of pasture and 200 acres of sorghum. Sor-
ghum production requires substantial equipment.
Ranch II has a machinery investment of $16,650
greater than Ranch I.


Inche


.94 Acre In gres
Acre in Sorghq
Carrying eapcity Incre-.. 24%


y c "M t


Table 5.-Investment and capital cost, 1,000-acre beef
cow-calf operation, St. Croix, 1973

Ranch I Ranch II
Item (grazing) (grazing-
silage)

Non-land investment capital: _-_--- Dollars ---
Buildings and facilities ___ 40,135 41,860
Machinery and equipment -- 18,550 35,200
Livestock: --------------- (114HU) (200 HU)
Nursing cows (1,100 lbs
at 30) -- --- ------ 37,620 66,000
Calves (325 lbs at 404) _--- 14,820 26,000
Dry cows (1,100 lbs at 30#) 33,990 52,800
Replacement heifers
($330 ea) ------------ 13,860 23,760
Replacement sires ($450 ea) 1,350 2,250
Heifers and young bulls
($280 ea) ------------ 16,240 28,840
Sires (1,500 lbs at 304) 4,050 6,300

121,930 205,950
Total non-land inv. cap. 180,615 283,010
Average investment --- 151,273 244,480
Interest on inv. cap.
at 7.5% -------------- 11,345 18,336
Operating capital:
Wage and salaries expense 23,755 26,040
Fuel, oil, lub. and ins. 3,064 4,022
Contract services --------- 4,165 4,165
Pest control chemicals, misc. 1,460 10,172
Total ------------- 32,444 44,409
Interest on 50% of op. cap.
at 7.5% -------------- 1,217 1,665




The benchmark ranch departs from present prac-
tice in one respect-that of brush control. The
larger ranches on the island control the acacia bush
on pasture with a crawler tractor equipped with a
single chisel. The chisel enters the ground near the
bush and literally pulls it out of the ground.
This machinery is a heavy investment for brush
control. It is reported that skilled tractor drivers
can clear three acres an hour. At that rate it would
cost less to hire the work done on a custom basis,
even at $20-$25 an hour.
Pastures are mowed four times a year. A 40-50
h.p. wheel tractor equipped with a rotary mower
is capable of handling the mowing operation. Two
such tractors are budgeted for that task. Brush con-














trol costs for labor, equipment fuel and contract
dozer services amount to about $15 per acre per
year.

Gross Returns

Costs are summarized in Table 5. The 1,000
acre Ranch I grazing operation cannot cover full
costs at present beef prices. At the time of this
study, prices for liveweight beef f.o.b. the farm were
$.40 per lb. for grass-fat yearlings of 850 lbs. and
$.30 per lb. for cull cows of 1,100 lbs.
If a rancher (1) maintains a calving rate of 85
percent, (2) sells at the above prices and weights,
(3) pays $2 per acre per year land taxes, (4) pays
his more skilled employees $100/week plus $100
for a house, (5) has $40,000 invested in fences,
wells, ponds, corrals, dipping vats etc., (6) dips his
cattle every two weeks for parasite control, (7)
mows his pastures four times a year and pulls out
acacia every other year, and (8) pays 7.5 percent
interest on average invested capital, he can expect
to lose about $19,000 per year (Table 6) if he ex-
pects no return on the investment in his land.
Ranch II, which specifies that 200 of the 1,000
acres are planted to sorghum, does somewhat better
but is still operating at a loss of about $15,360 a
year.
As a rule, St. 'Croix land values are substantially
above the value that an agricultural enterprise
might support. At the time of this study, land was
rarely selling for less than $2,500 per acre. Actually,
several tracts of agricultural land were on sale at
$3,000 to $14,000 per acre depending upon location
and zone. Therefore, residual return to land is
computed after a management salary equivalent
to $5,000 per year and interest on average invest-
ment of 7.5 percent is removed. The model specifies
that 40 percent of a manager's time is required to
operate the ranch, which is consistent with present
practice. A negative residual return to land means
that returns are not great enough to cover interest
on invested non-land capital or management.
Ranch I would about break even if no payment
were made for management, interest on non-land
capital or land. Ranch II would generate about
$9,600 to cover these items.
The residual return to land (RL) can be com-
puted under alternative levels of acres per animal
unit, price, taxes and wage rates by using the


Table 6.-CoAts and returns, 1000-acre beef cow-calf
operation, alternative models, St. Croix, 1973

Ranch I Ranch II
Item (grazing) (grazing-
silage)


Expenses:
Land taxes
Wages and salaries' --
Buildings and facilities -------
Production inputs ------
Machinery and equipment ..--
Interest on operating capital -_

Total ------...----

Income:
Heifers and young bulls _.---
Cull cows ----------------

Total ------
Gross loss or gain
Interest on average non-land
investment at 7.5% -----

Residual return to land


Return to land as a percent of
average non-land investment' -_


- Dollars-..-
2,000 2,000
23,755 27,240
3,425 3,206
1,560 10,172
9,266 11,575
1,217 1,665

41,223 55,860


19,635
14,025

33,660
-7,563

-11,345

-18,908


35,722
23,111

58,833
2,973

-18,336

-15,363


--_ Percent- .


-12.5


-6.3


I Includes a salary to management at the rate of
$15,000 per year. Forty percent of the manager's time is
charged to the beef enterprise.
'Land cost is not included as an expense.


following equation for Ranch I (grass only) con-
ditions:

(1) RL 336'600 P -1000T-237.55W-26,813
AU
Where RL= Residual return to land after all
other costs are covered ($),
AU= Acres per animal unit,
P= Price of liveweight heifers and
and bulls f.o.b. the farm ($/lb),
T= Taxes/acre/year ($), and
W=Wage rate ($/week)

The returns in Table 6 are based on the follow-
ing values for Ranch I:

RL= -$18,908,
AU= 4.0 acres/animal unit,









P= $.40/lb,
T= 2.00/acre, and
W=$100/week.

Ranch II has a greater investment in machinery,
uses more labor, has a smaller number of acres per
animal unit than Ranch I. To compute the residual
return to land to this operation under alternative
conditions, use the following equation:

(2) RL= 455'952 -P 1000T-272.4W-44,954
AU

Returns to Ranch II in Table 6 are based on
the value of the following cost and income factors:

RL= -$15,363,
AU 3.1 acres/animal unit,
P= $.40/lb,
T= 2.00/acre, and
W= $100/week.

To determine returns under alternative prices
or acre/animal unit levels, enter the new values


into equation (1) or (2) and solve algebraically.
For example, if on Ranch I, the wage rate (W)
were $80 per week and the selling price (P) were
$.60, the residual return to land (RL) would be
$2,673. The residual return values for a range of
the income and cost factors have been computed
and are presented in Tables 7 and 8.

Sales Estimates
Some ranch operations on the island are able to
stock the land heavier than presented herein. The
following equations (3 and 4) can be used to esti-
mate sales under varying assumptions for ranch
size, acres per animal unit, price, and sale weights
of animals.
For Ranch I (grass only and 85% calf crop):

(3) Sb (0.17 A We Pc) + ( 0.231 A WhPhb)
AU AU
where
S,,= Total Sales Value ($)

'The brood cow replacement is 20 percent per year.


Table 7.-Ranch I, residual return to land under selected costs-returns situations, 1,000-acres

Acres per Price/lb Weekly Taxes Return before Residual
animal young wage per interest on return
unit beef rate acre non-land capital to land
(AU) (P) (W) (T)
---------Dollars ..___ ______Dollars...........
4.0 .40 80 2 -2,812 -14,157
4.0 .40 80 4 -4,812 -16,157
4.0 .40 120 2 -12,314 -23,659
4.0 .40 120 4 -14,314 -25,659
4.0 .60 80 2 14,018 2,673
4.0 .60 80 4 12,018 673
4.0 .60 120 2 4,516 -6,156
4.0 .60 120 4 2,516 -8,829
3.0 .40 80 2 10,408 -937
3.0 .40 80 4 8,408 -2,937
3.0 .40 120 2 -1,094 -12,439
3.0 .40 120 4 -3,094 -14,439
3.0 .60 80 2 31,148 19,803
3.0 .60 80 4 29,148 15,602
3.0 .60 120 2 21,346 7,800
3.0 .60 120 4 19,346 5,800
3.0 .70 80 2 42,068 28,522
3.0 .70 120 2 32,566 19,020

336,600 P
RL=-- 336,600 P -1000 T-237.55 W-26,813
AU
Land costs are not included in the equation.











Table 8.-Ranch II, residual return to land under selected cost-returns situations. 1.000-acres

Acres per Price/lb Weekly Taxes Return before Residual
animal young wage per interest on return
unit beef rate acre non-land capital' to land
(AU) (P) (W) (T) (RL)


------- Dollars --........--
.40 80 2
.40 80 4
.40 120 2
.40 120 4
.60 80 2
.60 80 4
.60 120 2
.60 120 4
.40 80 2
.40 80 4
.40 120 2
.40 120 4
.60 80 2
.60 80 4
.60 120 2
.60 120 4
.60 80 2
.60 100 2
.75 80 2
.75 100 2


------Dollars-----.........
1,699 -16,637
-301 -18,637
-9,197 -27,533
-11,197 -29,533
27,753 9,417
25,753 7,417
16,857 -1,479
14,857 521
22,542 4,204
20,542 2,207
11,646 -6,690
9,646 -8,690
59,018 40,682
57,018 38,682
48,122 29,786
46,122 27,786
40,780 22,444
35,332 16,996
63,578 45,242
58,130 39,794


455,952 P
1RL= 455,952 P -1000 T-272.4 W-44,954
AU
Interest is costed at 7.5%. Land investment is not included.


0.17 A
---- Number of cull cows sold
AU
A = Acres of pasture
AU= Acres per animal unit
We= Weight of cull cows (Ibs)
Pc= Price ($/lb) of cull cows

0.231 A
---- A= Number of yearling heifers and bulls
AU
sold
Whb1= Weight of heifer or bull (lbs)
Pbb= Price ($/lb) of heifer or bull

The sales income for Ranch I in Table 6 is based
on the following:

AU= 4.0,
We= 1100 lb.,
Pc = $.30/lb.,
Whb = 850 lb., and
Phb=$.40/lb. for a total of $33,660 from


the sale of 4.25 head of cull cows and 57.75 head of
yearlings. If a ranch can carry more stock than as-
sumed above, the sales can be proportionately
greater. For example, if the acres per animal unit
are reduced to 3.5 from 4.0, the gross return in-
creases from $33,660 to $38,469.
Estimates for Ranch II can be computed by
using Equation No. 4 in the same manner.

(4) Sb= (0.2171 A We Pc) + ( 0.3257 A Whb Phb)
AU AU

where the code designations (A, AU, etc) are the
same as above. Examples of different sales values
at selected stocking rates are presented in Table 9.

Break-even Costs and Returns

The cost of producing grass-fat beef on Ranch I
is estimated to be 62.40 when all costs except land
are included at the levels presented in Table 6. If










Table 9.-Relationship between acres per animal unit
and market sales, Ranch II

Acres per Number of head for sale Gross
animal unit Cull cows Heifers and bulls receipts

4.0 54 81 $45,595
3.75 58 87 48,635
3.5 62 93 52,635
3.25 67 100 56,117
3.0 72 108 60,794
2.75 79 118 66,370


the carrying capacity can be improved to 2.6 acres
per animal unit, other factors remaining the same,
a rancher can breakeven at 400 per lb. The break-
even prices (P), Wage rates (W), and acres per
animal unit (AU) can be computed by using the
following equations:
Ranch I:
(5) P= (237.55W + 28,813) AU
336,600
336,600

(6) AU= 336,600
237.55W+ 28,813


1416.96 P
(7) W= -121.29
AU


where


P=Beef price, liveweight ($/lb)
AU = Acres per animal unit
W- Wage rate ($/week)

These relationships are illustrated in Figure 4.
To use, find the animal unit value on the vertical
axis, move horizontally to the right until you reach
an intersection with the desired wage rate, and
move directly down to find the price which will
allow you to breakeven. To illustrate, a stocking
rate of 4.0 and a wage rate of $80/week requires
a selling price of 57.5" cents to break even. At $100
a week, the break-even price is 62.4 cents. Detailed
data for the curves presented in Figure 4 are set
forth in Appendix Table 10.
Similar relationships are presented for Ranch II.
The break-even equations are:
= (272.4W+46,954) AU
455,952

AU 455,952 P and
272.AU=4W + 46,954and
272.4W+46,954


1,673.83 P172.37
AU

These relationships are presented in Figure 5.
The break-even price under present price condi-
tions is 50 cents per lb., still some 10 cents above
the pay price of 40 cents and the conditions pre-
sented in Table 6 and supporting documents.
Although the addition of the sorghum silage en-
terprise did not prove the ranch capable of covering
full costs, it did reduce the cost of production from


Beef Prce 7
Beef Price, Liveeimght (Cents/lb)


Figure 4. Break-even relationships which yield zero
residual returns to land, beef cow-calf operation,
Ranch I (grass only), St. Croix, 1973.


Beef Price, Liveweight (Cents/lb)


Figure 5. Break-even relationships which yield zero
residual returns to land, beef cow-calf operation,
Ranch II (grazing-silage) St. Croix, 1973.










62.4 to 50 cents per lb.

Internal Rate of Return

As a further refinement of the foregoing analysis,
the internal rate of return, or discounted rate of
interest as it is sometimes called, was computed for
both benchmark ranches. The internal rate of re-
turn provides a measure of long term profitability
under specified cash flow assumptions. The concept
is particularly useful if year-by-year cost and re-
turn relationships are expected to change over time.
For example, major capital costs may be incurred
during the first 2 or 3 years of a project while the
revenues may not reach full development levels
until the project is several years underway. Since
the internal rate of return is based on discounted
cash flows, it is useful in analyzing the above effects
even when based upon the same data used in the
conventional analysis.
In laymen's language, the internal rate of return
is the highest rate of interest on invested capital
that an enterprise could afford to pay and cover
total costs over the life of the project. Technically,
it is the rate of interest at which the sum of the dis-
counted income flow is equal to the sum of the dis-
counted cost flow. Alternatively, it is the rate of
interest at which the sum of the discounted differ-
ence in the cost and income flows is equal to zero.
The internal rate of return was computed by us-
ing the above procedure for both benchmark farms.
It was assumed that the cash flow would cover a
development period of 15 years. It seemed unwise
to select a longer period in view of the uncertain-
ties of agriculture in an urbanizing environment
such as that prevailing on St. Croix. As in the
earlier analysis, the limited investment concept of
non-land investment capital was used primarily
because it reflects the dominant land-use strategy
on the island, namely, that land is being held for
future development and it is devoted to agriculture
in the interim as a means of minimizing holding
cost. This concept is discussed at some length in
the next section of this report.
The internal rates of return on non-land capital
for the two .benchmark ranches are as follow:
Ranch I, grazing -2.0 percent
Ranch II, grazing-silage 3.9 percent.
If the rate of interest charged by banks is greater
than the internal rate of return, the enterprise is


considered not to be feasible since the cost of the
capital is greater than its earning capacity. On
these grounds, the two models are not considered
to be feasible even when no cost is imputed to the
land. (See the section on land strategy for a further
discussion of the reasons why ranchers might con-
tinue to operate under these conditions.)
The data used in computing the internal rate of
return is presented in Appendix Tables 8 and 9
and Figure A-l.

LAND USE STRATEGY

From the data presented above, it is clear that
prices will have to improve substantially, or carry-
ing capacity of cattle on the land improve mark-
edly, if beef operations are to meet their full costs
of production. One may ask what incentives exist
for continued production? The answer lies in the
land use strategy. If it is intended that the industry
be viable in its own right in meeting total costs, it
cannot long endure the severe cost-price squeeze it
is now under. On the other hand, if the land is be-
ing held for future intensive use and a means of re-
ducing the carrying cost of land is needed, beef pro-
duction may be able to continue for some time into
the future as long as out-of-pocket costs can be met.
Under present cost-price relationships, it is un-
likely that the degree of production efficiency can
be achieved to cover costs of production and gene-
rate a return on the investment in land (Table 10).
If, however, the land were purchased several years
ago at near agricultural prices, and the assets are
near full depreciation, existing operations can con-


Table 10.-Capitalized value of land based on its
earning capacity at selected rates of interest

Annual residual Capitalization rate of interest
return to
one acre of land 7.5% 8.5% 9.5%


Dollars
10
20
30
40
50
100
500
1,200


--------Dollars---------
133 118 105
267 235 211
400 353 316
533 471 421
667 588 526
1,333 1,176 1,053
6,667 5,882 5,263
16,000 14,118 12,632











tinue. This appears to have been the dominant
strategy in recent years.
In 1964, Park, Skov and Fuertes s identified 39
beef producers with 20 head of beef or more. This
inventory was repeated in conjunction with this
study. It was found that 11 of the original 39 pro-
ducers had terminated operations during the inter-

8op. cit.


Table 11.-Out-of-pocket costs and returns, 1,000-
acre grazing beef operation, St. Croix, 1973

Ranch I Ranch II
Item (grazing) (grazing-
pasture)

Expenses: -_- Dollarsi..-
Land taxes ---- 2,000 2,000
Wages and salaries ___ 21,355 23,640
Buildings and facilities 896 792
Production inputs -- 1,560 10,172
Machinery and
equipment ----- 7,779 8,332

33 590 44,936

Income:
Heifers and young bulls 19,635 (58) 1 35,700 (105)
Cull cows ---------- 14,025 (43) 23,100 (70)

33,660 58,800

Net loss or gain --------. $70 $13,864
Return as a percent of
non-land capital --- 0.04% 4.9%
1 Number in () means number of head sold.


evening nine-year period, but no new producers
joined the industry. It seems that if one is in the
business, he can stay; but it is extremely difficult to
start.
The relationship between out-of-pocket expenses
and income is presented in Table 11. Ranch I about
breaks even (+$70) while Ranch II nets out
$13,864. Under Ranch II conditions, out-of-pocket
costs can be met with a stocking rate as high as
4.1 acres per animal unit compared with 3.1 which
is believed feasible (Figure 6). The out-of-pocket
break-even price is 29.5 cents, 10.5 cents under
that received.


Acres per r
Animl Unit


5.-


k


-- = 5W


= $100

= $120


I I
I I


I I
I I
LU JI] 'NJ ,U CC


Beef Livewelght Price (Cents/ib)


Figure 6. Break-even points to cover out-of-pocket
costs, beef cow-calf operation, Ranch II, (grazing-
silage), St. Croix, 1973.


JR












AJrrklN UlIA


o. 50
o


50

S-100

-I50


I -I 1! I I
e-3 1 1 2 3 I 5
Rate of Interest


Figure A-1. Internal Rate of return on non-land In-
vestment, beef cow-calf operation, St. Croix.



Table A-1.-Use of land in the Virgin Islands for pasture on grazing, 1964 and 1970

Census year Percent
Item change
1964 1970 from 1964

Total number of farms ------------------------------------- 466 212 -55
Total land in farms (acres) ------------------------------ 39,539 20,470 -48
Cropland harvested (acres) -------------------------------- 5,134 737 -86
Average size of all farms (acres) ----------------------------- 85 97 +14

Number of farms using land for grazing --------------------- 279 100 -64
On farms of up to 49 acres --------------------------- 181 70 -61
On farms of 50 to 174 acres -------------------------- 57 15 -74
On farms of 175 to 499 acres ---------------------------- 24 7 -71
On farms of 500 to 999 acres ------------------------ 9 4 -56
On farms of 1000 acres or more --------------------------- 8 4 -50

Land used for pasture or grazing (acres) ------------------------ 19,611 7,583 -61
On farms of up to 49 acres ------------------------------ 1,046 662 -37
On farms of 50 to 174 acres ------------------------- ---- 2,766 850 -69
On farms of 175 to 499 acres -- --------------- 4,332 1,186 -73
On farms of 500 to 999 acres ----- ----------- 3,532 1,921 -46
On farms of 1000 acres or more --------------------------- 7,935 2,964 -63

Average amount of land per farm used for pasture or grazing (acres) -_ 70.3 75.8 +7.8
On farms of up to 49 acres --------------------------- 5.8 9.5 +63.8
On farms of 50 to 174 acres ------------------------------ 48.5 56.7 +16.9
On farms of 175 to 499 acres ------------------------ 180.5 169.4 -6.2
On farms of 500 to 999 acres ---------------------------- 392.4 480.2 +22.4
On farms of 1000 acres or more ----------------------- 991.9 741.0 -25.3


Source: Census of Agriculture, U.S. Department of Commerce, Computations by the author. Land
the 1970 Census was for actual use during 1969.


use reported in


Discounted r
Net Cash rio,,,


Ranch is IRR 2.0%
Ranch III IRR = 3.9%


r










Table A-2.-Selected characteristics of the livestock industry, St. Croix, St. Thomas and St. John,
Virgin Islands, 1970

Total
Item St. St. St. Virgin
Croix Thomas John Islands

Total number of farms ----------------------- 136 59 17 212
Percentage of farms ----------------------- 64 28 8 100
Land in farms (acres) ------ ----- -------- 17,669 2,249 552 20,470
Percentage of land ------------------------ 86 11 3 100
Harvested crop land (acres) -------------- 626 109 2 737
Percentage of land ------------------------- --85 15 100
Number of farms using land for grazing or pasture 67 20 13 100
Percent of farms ----------------------------- 67 20 13 100
Land used for grazing or pasture (acres) --_--- -- 6,208 1,152 223 7,583
Percent of land ---------------------------- 82 15 3 100
Number of cattle and calves ------------- 4,890 706 49 5,645
Percent of head ------------------------------ 87 12 1 100
Value of all livestock sold ($) ------ ---- 250,262 35,964 2,347 288,573
Percent of value -------------------------- 87 12 1 100

Source: Census of Agriculture, U.S. Department of Commerce, Computations by the author.
'Except for a very few exceptions, beef animals are located on St. Croix.
"R. L. Park and 0. Skov of USDA, Agricultural Experiment Station, St. Croix, inventoried the beef industry in
1964. They reported head of beef cattle in local herds.


Table A-3.-Average annual rainfall, selected stations St. Croix, U.S. Virgin Islands, long-term normal rates

Weather station Average
Month Anna's of three
Hope King's Hill Frederiksted Stations

----------------------_Inches__----------------
January ----------------------------------- 2.68 2.68 2.79 2.72
February ---------------------------------- 2.61 1.83 1.68 2.04
March ------------------------------------ 1.72 1.60 1.59 1.64
April --------------------------------------- 2.27 2.34 2.47 2.36
May --------------------------------------- 3.71 3.65 4.04 3.80
June .-------------------------------------- 2.90 3.22 3.06 3.06
July --------------------------------------- 3.25 3.36 4.22 3.61
August ----------------------------------- 4.07 3.78 4.37 4.07
September --------------------------------- -- 6.05 5.19 5.65 5.63
October ------------------------------------- 5.58 5.03 5.37 5.33
November ----------------------------- 5.22 5.29 5.30 5.27
December ------------------------------------ 3.23 3.27 3.31 3.27

Annual -------------------------------------- 43.29 41.24 43.85 42.80

Source: U.S. Weather Bureau, computations by the author.












Table A-4.-Wages and salaries cost, beef production unit, St. Croix, 1973

Man-year Annual Wage or salary
Employee of time Base Fringe' Perquisite Total

--- ---------Dollars--------.......----------
1,000-acre grazing operation:
Manager --------------------------- 0.4 6,000 591 -- 6,591
Husbandman ------------------------- .C 5,200 512 1,200 6,912
'Helper ---------------------------- 1.0 4,160 410 1,200 5,770
Temporary workers -------------------- 0.5 2,080 205 -- 2,285
Accountant services' --------------- 0.2 2,000 197 -- 2,197

Total ------------------------------------ 19,440 1,915 2,400 23,755
Average wages and salaries/acre -----------------
1,000-acre grazing-silage operation: 19.44 1.92 2.40 23.76
1,000-acre grazing operation less: ------------------ 19,440 1,915 2,400 23,755
Temporary workers ---------------------------- 2,080 205 -- 2,285
Additional farm worker --_ ----- 1.0 4,160 410 1,200 5,770

Total ------------------------------ 21,520 2,120 3,600 27,240
Average wages and salaries/acre ------------------- 23.60 2.32 3.60 29.55

'Includes fica, UI, W Comp., 9.85%.
"Either in providing a house or at $100 per month.
'Frequently provided by the manager or his wife.
'Does not include stumping operation.
'To assist in the harvest season, 2 men for 3 months each.


Table A-5.-Buildings and facilities cost, beef production unit, St. Croix, 1973

Unit Years to Annual Repair
Unit cost replacement depreciation' cost'
Dollars Years _- Dollars.....--
1,000-acre, grazing operation:
Office (10' X 20' at $5/sq ft) -------------------- 1,000 40 25 20
Storage shed and machine shop (20' x 40' at $2/sq ft) -__ 1,600 20 80 32
Corrals, loading chute and dipping vat -------------- 7,000 30 233 140
Fences (10-100 acre fields and 11.25 miles at $2300/mi) 25,875 15 1,725 518
Wells (2 with pump and trough) ----------------- 1,660 20 166 66
Ponds (2) ---------------------------------------- 3,000 20 300 120

Total _------------------------------------- 40,135 2,529 896
Average per acre ---------------- 2.53 .90
1,000-acre, grazing-silage operation:
Grazing operation w/o fence ------------------------ 14,260 __ 804 378
Trench silo (4600 at $1.50/T) ------------------- 6,900 30 230 ---
Fence (10-100 acre fields, 11.25 mi at 1840/mi) ---- 20,700 15 1,380 414

Total --....---------------------------------- 41,860 2,414 792
Average per acre ------------------------------- 41.86 __ 2.41 .79

Straight-line method
2 At 2% of original cost per year
*Based on costs by V.I. Department of Agriculture, Bent Lawaetz









Table A-6.-Production inputs and services cost, beef production unit, St. Croix, 1973

Unit
Specification Amount price Total

1000-acre, grazing operation:
Veterinary services ------------------ ------------ ----- --- --- $ 100
Pest control, dipping ----------------- Symex, Corral 420 lbs. $3.00 1,260
Supplies and utilities ---------------- Miscellaneous ----- 200

Total ---------------------------------------------------------------------- $ 1,560
Average input cost/acre ----------------------------------------------------------- $ 1.56
1000-acre, grazing-silage operation:
Grazing operation costs ------------- ---------- ------- ---- $ 1,560
Sorghum seed ---------------------- Hybrid 2,400 lhs. .23 552
Fertilizer -------------------------- 15-5-20 800 cwt. 6.50 5,200
Pesticides --------------------------- Symex 260 lbs. 3.00 780
Diazonal 400 pts. 2.50 1,000
Altrazine 600 lbs. 1.80 1,080

Total ---------------------------------------------------------------------- $10,172
Average input cost/acre -------------------------------------------------------- $ 10.17

1For 200 acres of sorghum
Mention of a trade name of a product does not imply endorsement of any kind.













Table A-7.-Machinery and equipment cost, beef production unit, St. Croix, 1973

Purchase Years to Annual' Annual' Hours of Fuel' Oil & lub* Contract
Item cost replacement depreciation repair cost operation cost cost Insurance services

Dollars Years ....Dollars--.... Hours ---- ----Dollars---------------
1,000-acre, grazing operation:
Pickup truck, Y/-ton *---------- 2,250 6 375 67 110 330 3 100 --
Wheel tractors, two 40-50 HP 13,000 15 866 390 2,200 2,565 66 ---
Blade ------- 300 15 20 9 -- -
Rotary mowers, two ----------- 2,800 15 186 84 ----
Miscellaneous tools ------------ 200 5 40 -- --
Crawler tractor (145 HP) -- -- -- -- -- -- 4,165

18,550 1,487 550 2,895 69 100 4.165
(Total mach. and eq. cost = $9,266)
(Avg. mach. and eq. cost/acre = $9.27)
1,000-acre, grazing-silage operation:
Grazing operation cost -------- 18,550 1,487 550 2,895 69 100 3,332
Forage harvester -------------- 4,500 10 450 135 --- --.. ---
Front end loader- -------- 1,000 15 67 30 --- ----
Planter ---------------------- 900 15 60 27 --- ----
Plow ------------------800 15 53 --- ---- ----
Fertilizer spreader ------850 15 57 26 --- --- -
Disc harrow------------------ 1,000 15 67 -. -- --
Wagons, self-unloading (3) 3,000 10 300 90 --- -- -
Wheel tractor, small ----------__ 4,000 15 267 120 800 934 24 ---
Welder and shop tools --------- 600 10 60 --- -- -- --

35,200 3,243 978 3,829 93 100 3,332
(Total mach. and eq. cost = $11,575)
(Avg. mach. and eq. cost/acre = $12.41)

Straight-line method
2 At 0.03 of original purchase price per year
Hours of operation were 110, 2,200, and 800 for pickup, large tractors and small tractor respectively
'At $0.03 per hour of operation
Half is charged to ranch
Custom contracted at $25/hr. Total range is covered every 2 years at a rate of 3 acres/hour

















Table A-8.-Discounted net cash flow for a beef cow-calf operation, Ranch I (grass only), St. Croix, 15-year project period

Non-land Total Net Discounted net income flow
Year capital Production project Income income
expenditure cost cost flow 3% 4% 5%

1 $180,615 $33,590 $214,205 $ 33,660 $-180,545 $-175,291 $-173,594 $-171,951
2 __ 33,590 33,590 33,660 70 66 65 63
3 __ 33,590 33,590 33,660 70 64 62 60
4 33,590 33,590 33,660 70 62 60 58
5 200 33,590 33,790 33,660 -130 -112 -107 -102
6 -- 2,250 33,590 35,840 33,660 -2,310 -1,935 -1,826 -1,724
7 -- 33,590 33,590 33,660 70 57 56 50
8 33,590 33,590 33,660 70 55 51 47
9 33,590 33,590 33,660 70 54 49 45
10 --- 200 33,590 33,790 33,660 -130 -97 -88 -80
11 __ 33,590 33,590 33,660 70 51 45 41
12 2,250 33,590 35,840 33,660 -2,310 -1,620 -1,443 -1,286
13 --- 33,590 33,590 33,660 70 48 42 37
14 33,590 33,590 33,660 70 46 40 35
15 ---.. 33,590 33,590 163,570 129,980 83,434 72,178 62,520

TOTAL $ -54,815 $ -95,118 $-104,410 $-112,187
















Table A-9.-Discounted net cash flow for a beef cow-calf operation, Ranch II, supplemental silage feed, St. Croix, 15-year project period

Non-land Total Net Discounted net income flow
Year capital Production project Income income
expenditure cost cost flow 3% 4% 5%

1 -- $283,010 $ 44,936 $327,946 $ 58,800 $-269,146 $-261,314 $-258,784 $-256,335
2 -_ 44,936 44,936 58,800 13,864 13,068 12,819 12,575
3 .... 44,936 44,936 58,800 13,864 12,637 12,325 11,976
4 .... 44,936 44,936 58,800 13,864 12,318 11,851 11,406
5 -_ 200 44,936 45,136 58,800 13,664 11,787 11,230 10,706
6 __- 2,250 44,936 47,186 58,800 11,614 9,727 9,179 8,666
7 -- 44,936 44,936 58,800 13,864 11,273 10,535 9,853
8 --- 44,936 44,936 58,800 13,864 10,944 10,130 9,383
9 .... 44,936 44,936 58,800 13,864 10,625 9,741 8,937
10 .... 8,300 44,936 53,236 58,800 5,564 4,140 3,759 3,416
11 .... 44,936 44,936 58,800 13,864 10,015 9,006 8,106
12 ---- 2,250 44,936 47,186 58,800 11,614 8,147 7,254 6,467
13 _- 44,936 44,936 58,800 13,864 9,441 8,327 7,352
14 -- 44,936 44,936 58,800 13,864 9,165 8,006 7,003
15 -_ 44,936 44,936 280,025 235,089 150,904 130,545 113,078

TOTAL $296,010 $674,040 $970,050 $1,103,225 $ 133,175 $ 22,877 $ -4,077 $ -27,411











Table A-10.-Break-even points which will yield a
zero residual return to land, beef cow-calf operation,
St. Croix. 1973

Liveweight Wage Acres per animal unit
market rate Ranch I Ranch II
price per (grazing) (grazing-
per lb. week silage)

___ Dollars -----
0.40 80 2.82 2.65
.40 100 2.56 2.45
.40 120 2.35 2.29
.55 80 3.87 3.65
.55 100 3.52 3.37
.55 120 3.23 3.15
.70 80 4.93 4.64
.70 100 4.48 4.30
.70 120 4.11 4.01

336,600 P
Ranch I: AU= 336,600 P
237.55 W+28,813
455,952 P
Ranch II: AU=--
272.4 W+46,954


Table A-11.-Break-even points for out-of-pocket
costs, beef cow-calf operation, St. Croix, 1973

Liveweight Wage Acres per animal unit
market rate Ranch I Ranch II
price per (grazing) (grazing-
per lb. week silage)

.....Dollars---
0.40 80 4.5 4.5
.40 100 4.0 4.1
.40 120 3.6 3.7
.55 80 6.3 6.2
.55 100 5.5 5.6
.55 120 4.9 5.0
.70 80 8.0 7.9
.70 100 7.0 7.1
.70 120 6.2 6.4

336,600 P
Ranch I: AU= 336,600 P
213.55 W+12,235
445,952 P
Ranch II: AU= -
236.4 W+21,296


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