Case Study Memorandum
TO: Dr. Kathleen Sheehan, BECO 4310 - 003
FROM: Brian J. Walsh
RE: Old Mule Farms
The Old Mule Farms is a cow-calf operation that provides calves for feedlots to fatten up before being sent to packing houses and eventually sold as meet for consumers. The current owners have been experiencing a problem with losses in revenue. The expenses that Old Mule Farms incurred are veterinary bills, labor, nutritional supplements and minerals, and a variety of forage. The forage is primarily grazed grasses but is supplemented with hay.
The owners of the farm have found a correlation between the weight of a cow, and the cost of feeding it, in conjunction with the weight of a calf. The problem that they currently face is three fold. First, what is the proper size of a cow for their herd? Second, what is the best approach to use in measuring a proper size: weaning a calf that is 50% of the mother’s size, or comparing the value of a calf to the cost of maintaining a cow? Last, what are the primary cost drivers in the calf-cow operation, and is the revenue-expense calculation currently in use clear regarding the cost drivers?
Based on Old Mill Farms research, a cow above or below 1200 lbs. has a lower weaning calf weight than a cow that is 1200 lbs. The optimum weaning calf weight is when a cow is 1200 lbs.. To answer the first question Old Mule farms has, the proper cow size should be 1200 lbs. to produce the optimum calf size.
Research that the owners found indicates that the heavier a cow is, the more a cow consumes in dry matter, supplements, and minerals. Specifically, for each 100 lbs. of additional weight a cow has, a cow will consume an additional 547.5 lbs. of dry forage, 13.56 lbs. of supplements, and 7.29 lbs. of minerals each year.
All of this indicates the weight…...