The objectives of this paper are to quantify the market values of certain beef cattle management and marketing practices recommended by the Texas Agricultural Extension Service as they relate to beef cow-calf industry in south Texas. These practices include castration of male calves prior to sale along with breeding recommendations. The ability to estimate the economic impact of these recommendations is extremely helpful in program interpretation to public sector decision makers as well as producers.

The Extension Service has been heavily involved in making management and marketing recommendations to beef cattle producers in Texas for over 60 years. In that time, considerable progress has been made in the quality of the cattle in Texas and the management techniques implemented by producers. However, due to increasing demands on public resources, the need to evaluate the economic value of these recommendations is gaining in importance. It was in this framework that the "Marketing for the Most" program was begun in 1992 by the Texas Agricultural Extension Service.

The "Marketing for the Most Program" has sponsored a special stocker and feeder cattle sale held the first week in November every year since 1992. In these four sales, a total of 1,519 head were sold in 625 individual lots, with average annual weights and prices shown below (Table 1).

Table 1. Average Weight, Price per Head and Price per Cwt. by Class

	Average Weight					Average $ per Cwt.
Class	1992	1993	1994	1995		1992	1993	1994	1995
Feeder Bulls	626	684	590			73.77	69.98	65.02
Feeder Heifers	559	559	558	575		73.54	72.41	65.04	46.53
Feeder Steers	654	612	594	648		77.21	72.98	73.17	54.06
Stocker Bulls	483	476	425			80.95	81.45	75.91
Stocker Heifers	460	457	416	471		75.17	77.69	67.49	47.86
Stocker Steers	481	508	447	508		84.61	86.15	79.42	54.87

Attributes recorded for each lot included price, sex, fame score, muscle score, flesh condition, breed type, and size of lot. An intriguing characteristic of this data set is that the destinations of these calves was determined by the order number of the buyer, which allows a determination to be made as to the possible differential in value of certain attributes to either stocker or feeder calf buyers.

To approach the problem of valuing Extension recomendations, we begin by viewing each lot of calves as a collection of certain attributes (Ladd and Martin), which may have differing values to producers purchasing the animals as stocker or feeder calves . The data for each lot is then used in conjunction with a modified hedonic price model (Table 2). The hedonic type model is seen widely in the literature, and has been used in analysing the factors that affect of auction price differentials of both cows (Mintert, et al.) and feeder cattle (Buccola; Schroeder et al.).

The single equation model developed in this study is straightforward, with the goal to first test the hypothesis that the prices for stocker or feeder steers is significantly higher than that for stocker or feeder bulls, so a value can be arrived at for the recomendation that bull calves should be castrated before sale. The model uses a base of a large frame, Number 1 muscled stocker steer as a base. This structure allows the value of breeding recommendations to be evaluated by development of estimates of the relative value of frame size and muscling. The primary determinant within the model for the price of each lot is the average weight for each lot.

Table 2. Estimated Model for Stocker and Feeder Calf Prices

Variable	Parameter Estimate	Standard Error	Prob > |T|
Intercept	101.4027	1.3671	0.0001
Weight	-0.0309	0.0024	0.0001
Stkr*Hfr*Wt	-0.0145	0.0011	0.0001
Stkr*Bull*Wt	-0.0025	0.0015	0.0971
Fdr*Str*Wt	-0.0013	0.0013	0.2982
Fdr*Hfr*Wt	-0.0138	0.0014	0.0001
Fdr*Bull*Wt	-0.0054	0.0016	0.0011
Yr95	-30.1185	0.7148	0.0001
Yr94	-8.9334	0.7220	0.0001
Yr93	-0.7533	0.5852	0.1985
Medium	-2.9422	0.4951	0.0001
Small	-8.5660	0.8424	0.0001
Muscle2	-2.5404	0.6032	0.0001
Muscle3	0.5098	1.4003	0.7159
n = 625 Adjusted R2 = 0.8628

where;

Weight is the average weight of each lot in pounds,

Stkr*Hfr*Wt is the average weight if the lot is stocker heifers in pounds, 0 otherwise,

Stkr*Bull*Wt is the average weight if the lot is stocker bulls in pounds, 0 otherwise,

Fdr*Str*Wt is the average weight if the lot is feeder steers in pounds, 0 otherwise,

Fdr*Hfr*Wt is the average weight if the lot is feeder heifers in pounds, 0 otherwise,

Fdr*Bull*Wt is the average weight if the lot is feeder bulls in pounds, 0 otherwise,

Yr95 is 1 for a lot of calves sold in 1995 and 0 otherwise,

Yr94 is 1 for a lot of calves sold in 1994 and 0 otherwise,

Yr93 is 1 for a lot of calves sold in 1993 and 0 otherwise,

Medium is 1 for a lot of calves with a medium frame score and 0 otherwise,

Small is 1 for a lot of calves with a small frame score and 0 otherwise,

Muscle2 is 1 for a lot of calves with a muscle score of 2 and 0 otherwise,

and

Muscle3 is 1 for a lot of calves with a muscle score of 3 and 0 otherwise.

The expected values of each attribute derived from the sales data with the modified hedonic price model for the differential of stocker and feeder steers relative to stocker and feeder bulls, along with frame score and muscling are combined with county cattle inventory data available from the Texas Agricultural Statistics Service to generate expected sales differentials due to Extension recommendations. Total economic impact is then calculated from multiplying the change in sales due to the Extension recommendations by a sector output multiplier for beef cattle (Jones and Wyse).

Preliminary analysis reveals that large differences exist for cattle with medium and small frame scores, ranging from discounts of $14. 70 to $42.85 per head. Calves with muscle scores of 2 are estimated to be discounted $2.56/cent relative to calves with muscle scores of 1. Price differentials for steers relative to bull calves are estimated at $1.23/cent for stocker calves and $3.49/cent for feeder calves.

This information will be coupled with cattle inventory and regional sales volume data to arrive at estimates of regional impacts on cash receipts of recommended practices. These estimated cash receipts will also be used with sales multipliers to arrive at estimates of total regional economic impacts.

Interpretation of Extension program benefits to legislators and other decision values has led to calls for greater economic analysis of program impacts. This paper is an effort designed to provide economic analysis for program interpretation purposes to decision makers and producers. These results will support decisions on the allocation of public resources as well as firm-level decision making by producers.

Buccola, S. T. "An Approach to the Analysis of Feeder Cattle Price Differentials." American Journal of Agricultural Economics, 62(1980):574-580.

Ladd, G., and M. Martin. "Prices and Demands for Input Characteristics." American Journal of Agricultural Economics, 58(1976):21-30.

Mintert, J., J. Blair, T. Schroeder and F. Brazle. "Analysis of Factors Affecting Cow Auction Price Differentials." Western Journal of Agricultural Economics, 13(1988):71-81.

Schroeder, T., J. Mintert, F. Brazle and O. Gruenwald. "Factors Affecting Feeder Cattle Price Differentials." Western Journal of Agricultural Economics, 13(1988):71-81.