But along the information superhighway, there are possible pitfalls, explained Barry Dunn, executive director of Texas A&M University’s King Ranch Institute for Ranch Management near Kingsville, Texas. Dunn addressed the crowd gathered for the first full day of the 2004 Beef Improvement Federation (BIF) Research Symposium and Annual Meeting in Sioux Falls, S.D.Traditionally, the beef industry — especially the cow-calf and stocker sectors — has been slower to adopt technology compared to other industries. When breeders do consider implementing new technology, however, Dunn says an extended cost analysis is necessary to determine whether it would be cost-effective.
Doing a partial budget is a common, relatively useful way to analyze economic merit of implementing new technologies. By calculating additional costs and revenues and reduced costs and revenues, a net change in profit can be determined using a partial budget format.
However, this simple analysis is limited, Dunn warns. Breeders must also consider marginality, possible implications and interactions, unexpected outcomes, risk, cash flow, quality of life and other factors.
Dunn also suggests considering fixed costs in addition to variable costs when conducting cost analysis on new technology, and measuring the impact of newly adopted technologies at the end of the production cycle.
“What’s more important to me is how many cows have I bred, it’s how did it impact pounds sold, and what did it cost me in terms of pounds sold, not per head,” he said. “The correct feedback is absolutely critical.”
The concept of marginality is also critical when considering the implementation of technology.
“You can get 98% preg. rates, but getting 99% preg. rates is just very difficult, and it’s much more difficult to jump from 98 to 99 than 89 to 98 because something else becomes limiting. Along with that, the price for those small units of change goes through the roof.”
If you’re at a very high level of reproductive performance, and nutrition is good, you can still probably improve those pregnancy rates by applying technology, but, he continued, “the next unit of change is going to be very expensive.”
A casual loop diagram is a simple, effective way to measure possible outcomes of applying technology (click here for Dunn’s proceeding paper and more information on casual loop diagrams and simulation models).
Finally, Dunn says evaluating the impact of technology on a production system is complex. However, he suggests following a systems approach:
• describe the situation/problem ;
• examine mental models;
• measure and define criteria to put things like marginality and future value in context;
• use some casual loop diagrams; andd
• develop simulation models.
“For a long time we’ve used the microscope to reduce something down, study it, know it, and be passionate about it,” he said. “And that’s a valuable, credibly admirable thing to do, but so is looking at the landscape … A systems approach isn’t buried on a hilltop with a pair of binoculars.”