Measuring Beef Cattle Efficiency in Australian Feedlots: Applying Technical Efficiency and Productivity Analysis Methods

Abstract

Intensive livestock systems differ from most pasture-based systems in that managers exert much greater control over the production cycle and the quality of animals entering the system. Consequently, technical inefficiencies among animals tend to be much more easily eradicated. Nevertheless, a range of factors could still cause both technical inefficiency and variations in productivity between animals. These factors are the focus of analysis in this study of a beef cattle feedlot system operating under experimental conditions. Technical efficiency and productivity analyses usually focus on the activities of firms or institutions using inputs to produce outputs, and the differences between them (Fleming et al. 2006). In this paper, we report on the efficiency with which physical characteristics of individual lot-fed beef cattle are combined with conventional inputs to produce a final product with several attributes. Data on 214 animals across seven breeds were used to estimate a stochastic input distance function with multiple inputs and multiple outputs. Estimates were obtained after controlling for differences between breeds, years and sex. A high mean technical efficiency was estimated for the cattle as a group but it was found that different breeds have significantly different output frontiers and inefficiency levels. These differences are most likely associated with variation in genetic merit between sires within and between breeds and the different farming and climatic backgrounds of the animals' cohorts. Results are reported on the input-output relationships as well as the relationships between the outputs. Important findings in respect of output relationships in this sample are that the proportion of meat weight retained after cooking is positively associated with the meat quality sensory score, and carcass weight is negatively associated with the meat quality sensory score. No relationship was discerned between carcass weight and the proportion of meat weight retained after cooking. It is expected that the further application of these technical efficiency and productivity analysis methods to physical cattle data will lead to improvements in the valuation of different animal attributes in genetic selection software packages.