1. A case study of the economics of
Raramuri Criollo (RC) cattle production in
the deserts of Southern New Mexico
Agricultural Economics and Agricultural Business
Joy C. Enyinnaya, B.Sc.
Thesis Defense
July 15, 2016
Prof. Allen Torell, advisor
2. Introduction
Agricultural Economics and Agricultural Business
Introduction Methods
Results/
Findings
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Implications
Future
Studies
Demand for grass-fed, naturally raised, locally produced meats is
increasing
Finding breeds of cattle in the United states that can efficiently
finish well on grass had been problematic
Raramuri Criollo cattle possess a unique foraging behavior and are
willing to travel long distances from water
4. RC unique features
Agricultural Economics and Agricultural Business
Why is Criollo Cattle, a potentially viable economic
alternative?
• Improved grazing distribution increases harvested
AUMS
- Decrease grazing pressure on over-used areas
• High fertility and longevity
• Hardy, self-reliant and suited to arid environments
• Quality carcass from forage diet
• Mild temperament
• Good mothers and small calves
‒Reduced calving problems
‒Potential for cross-breeding
• Healthy with minimal vaccination,
parasite and fly control.
5. The Gap
• Lack of information on the economic potential of Criollo
cattle because production only started about 12 years ago
• Limited information on the cost and returns of producing
livestock on the desert ranches of the Southwest
Agricultural Economics and Agricultural Business
Introduction Methods
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Future
Studies
6. Objectives
Compare cost and return estimates for
producing Raramuri Criollo (RC) cattle
with Angus-Hereford (A x H) cross cattle
typically found on Chihuahuan desert
ranches.
Key production and economic differences
include
Foraging behavior
Production and live weight
Market and sale price
Production costs
Agricultural Economics and Agricultural Business
7. Agricultural Economics and Agricultural Business
Objectives
Explore the economics of alternative
marketing options for RC cattle with
sales at farmer’s markets, based on
the direct marketing experiences of
Dennis and Deborah Moroney of the
47 Ranch near Bisbee, AZ.
8. Introduction Methods
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Studies
Methods (JER)
Terms and definitions
• Animal Unit (AU) – measure of animal equivalency
based on forage demand relative to 1000 pound
cow
• Animal unit month (AUM)- amount of forage required
by an AU per month
• Animal Unit Yearlong (AUY)- amount of forage
required by an AU per year
Agricultural Economics and Agricultural Business
9. Methods (JER)
The USDA-ARS Jornada Experimental Range (JER) introduced RC
cattle from Mexico in 2005
An enterprise budget was developed for 225 AUY RC herd based on
production and marketing experiences of the JER (Primary data)
An enterprise budget was developed for a 150 AUY A x H cow/calf ranch
based on previously published budgets (Secondary data)
Agricultural Economics and Agricultural Business
Introduction Methods
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Findings
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Implications
Future
Studies
10. Methods
Based on RC improved grazing distribution characteristic, a
50% increase in carrying capacity was considered;
- A x H cattle – 150 AUY capacity
- Criollo cattle – 225 AUY capacity
Two different beef price scenarios were considered:
– Scenario 1: Average real 2011-2015 beef prices
– Scenario 2: Record 2015 high beef prices
On-the-hoof sale prices for RC cattle were discounted by about 20% based on JER marketing
experience.
Agricultural Economics and Agricultural Business
Introduction Methods
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Findings
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Future
Studies
11. Methods (47 Ranch)
Agricultural Economics and Agricultural Business
Farmers
market
partial
budget
Animal
purchase
cost
Feeding
cost
Slaughter/
Processing
cost
Refrigeration
cost
Marketing
cost
A farmers market partial budget was developed based on marketing
experiences of Dennis and Deb Moroney of the 47 Ranch (Primary data)
Two different beef price scenarios were also considered (5 year average
prices and 2015 high beef prices)
Cost variables considered in the farmers market partial budget include
Introduction Methods
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Studies
12. Results/Findings
Production differences
Agricultural Economics and Agricultural Business
Description A x H RC
Mean cow culling age1
10 18
Mean bull culling age 7 12
Calving month April June
Calf crop at weaning 85% 91%
Cow-to-bull ratio 16:1 30:1
Mean calf birth weight 34 12
Steer sale weight 215 @ 7 months 431 @ 30 months
Heifer sale weight 204 @ 7 months 318 @ 24 months
Average cow weight 454 363
Average bull weight 612 499
Cow, bull and heifer death loss (%) 1% 1%
Sale animals death loss (%) 2% 1%
1
age in years; weight in kg
Introduction Methods
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Studies
16. Farmer’s Market Partial Budget
Agricultural Economics and Agricultural Business
Introduction Methods
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Future
Studies
17. 47 Ranch Marketing effort
Loads cows to trailer,
drives to UA meat lab
for
slaughter/processing,
200 miles
4 weeks later: picks
up processed meat,
delivers to
commercial
customers
Drives 36 miles to
Nathen (Walk-in
freezer) to store
rest of the meat
Thursdays: farmers
market, Sierra
vista, spends about
8 hours in direct
marketing, 100
miles
Saturdays:
farmers market,
Bisbee, 120 miles
Agricultural Economics and Agricultural Business
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Studies
18. Prices/kg of meat cuts sold at farmers market
Agricultural Economics and Agricultural Business
$24.86
$15.43
$13.23
$22.05
$18.37
$15.16
$7.75
$5.20
$6.12
$8.57
$5.82
$5.11
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
chuck steaks cowboy rib steak Round steak sirloin steak roast ground beef and
stew meat
$/kg
Meat cut
Farmers market Grocery store
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19. Agricultural Economics and Agricultural Business
$3,133/
head
$944/
head
$100/
head $80/head
$22.15/
head
$1,319/
head
$2,465/
head
$668/
head
$1,108/
head
$2,254/
head
$879/
head
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
Revenue Slaughter and
processing cost
Marketing cost Feeding cost Refrigeration
cost
Animal purchase
cost
Total cost Net returns
2015 High prices
5-year average prices
Farmers market partial budget analysis
Introduction Methods
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Future
Studies
20. Summary and Implications
• Favoring RC production
– Criollo cattle is a profitable option for a large, expansive, and poorly watered
pasture
– RC heifers make great breeders
– With 50% increase in carrying capacity, there is breakeven for RC
enterprise
– Reduced production costs
– Improved rangeland health and restoration of overgrazed areas
• Challenges for RC production
– Lack of structured market
– AxH can raise 3 sets of steer calves in the duration of raising one RC steer
calf
– Lack of infrastructure for slaughter and processing
Agricultural Economics and Agricultural Business
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Future
Studies
21. Future studies
• Explore the economics of combining production
and marketing estimates in one budget
• Explore the economics of different marketing
strategies
– Cross breeding Criollo cattle
– Phone and internet sales
– Subscription based buying clubs
Agricultural Economics and Agricultural Business
Introduction Methods
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