THE WHEAT AND STOCKER CATTLE ANALYZER: A MICROCOMPUTER DECISION AID FOR EVALUATING WHEAT PRODUCTION AND STOCKER CATTLE GRAZING DECISIONS

Abstract

number of random variables. These variables inThe Wheat and Stocker Cattle Analyzer is a mi- ude wheat yield, stocker cattle weight gain, wheat crocomputer decision aid for evaluating interrelated price, and early and late spring stocker cattle prices wheat production and stocker cattle grazing deci- (the relevant stocker cattle price depends on whether sions under yield, weight gain, and price uncertainty. winter or winter-and-spring grazing is being considAn important feature of the model is that wheat ered). Clearly this choice set and these uncertain commodity program provisions are incorporated factors create a complex decision environment for into the analysis. A wide range of alternatives in- wheat producers. cluding wheat production for grain only, owned Commodity program provisions of the 1985 farm stocker cattle grazing, and wheat pasture leasing can bill increased the attractiveness of some stocker be evaluated by the program. cattle grazing opportunities available to wheat producers. This bill authorized the Secretary of Agriculwheat, feed grains, and rice a reduced planting alterc~Stocker~~~ ctl ri o h pnative commonly referred to as the 50/92 option Stocker cattle grazing on wheat pasture is an im- (Glaser). This was amended by the Omnibus Budget portant agricultural enterprise in the Southern Plains Reconciliation Act of 1987 to become a 0/92 option and the southeastern United States. A number of for wheat and feedgrains. Under these provisions, alternatives are available to wheat producers includ- commodity program payments are not restricted to ing (1) growing wheat for grain production with no acreage planted for harvest, as they were under stocker cattle grazing, (2) grazing stocker cattle on previous farm bills. For example, when a 50/92 wheat pasture during the winter months and remov- option is in effect for wheat, a producer who plants ing them in the early spring and harvesting wheat for for harvest between 50 and 92 percent of his farm's grain, and (3) grazing stocker cattle on wheat pasture permitted acreage receives 92 percent of the defiduring the winter and spring, foregoing grain pro- ciency payment that would have resulted if full duction. i If wheat pasture is grazed, several addi- permitted acreage had been planted for harvest. 2 tional options also are available, including stocker Stated differently, as little as 50 percent of permitted cattle ownership and custom pasture lease arrange- acreage can be planted for harvest with only an 8 ments. Outcomes of alternative wheat production percent deficiency payment reduction. The same is and stocker cattle grazing decisions depend on a true when a 0/92 option is in effect, except acreage