64 2001 Journal of the ASFMRA | www.asfmra.org An Economic Analysis of Cow-calf Retained Ownership Strategies

Retained ownership takes place when a producer keeps title of a group of calves beyond the traditional weaning period. The potential benefits and risks to retaining ownership are well-documented (Murra et. al., Joerger, Pierce, Guyer, Mc Kissick & Ikerd, Little et. al., Marshall & Wagner, Lawrence). For purposes of this article, ownership is assumed to be retained via contractual arrangements with custom feeders. Custom feeding means maintaining ownership of calves and the right to make major management decisions, even though the animals are not kept on the cow-calf producer's farm. Retained ownership as a management strategy is not widely practiced by Saskatchewan beef producers. The sale of most calves after weaning in September and October still dominates the industry. Some ownership is retained by backgrounding animals, but it will be shown below that this puts the cow-calf producer in a worse position with respect to both return and risk. Objective The objective of this article is to explore the risk efficiency of various retained ownership strategies for cow-calf producers. Six alternatives are examined in this paper. The first is a cow-calf (CC) operation only, wherein ownership of a calf crop is relinquished after weaning. The second is cow-calf production and custom The article explores the risk efficiency of six strategies for beef producers using data from Saskatchewan, Canada for 1978 to 1997. The results indicate that the risk efficient strategies for the Saskatchewan beef industry are the cattle finishing enterprise and the cow-calf producer retaining ownership through both custom backgrounding and finishing