To BSE or not to BSE: a capital budgeting analysis of the use of the bull breeding soundness evaluation (BSE) to improve reproductive efficiency and profitability in cow-calf herds.

Abstract

The breeding soundness evaluation (BSE) as defined by the Society for Theriogenology is intended to identify subfertile bulls. Removing subfertile bulls and replacing them with fertile bulls is expected to produce financial benefits in the form of more pregnant cows within a designated breeding season and subsequently higher weaning rates. However, past survey results of cow-calf producers indicate low adoption rates of the BSE. To better understand the rationale of these decisions by producers, a financial evaluation by means of a capital budgeting model was developed to calculate the net present value (NPV) of two different herd management strategies; one that performs BSE to one that does not. Because there are various sources of uncertainty in cattle production, a Monte Carlo simulation analysis was employed to estimate the differences between the expected NPV of these two strategies. Simulations were conducted across a range of plausible fertility differences from using BSE and revenues were generated from the resulting calf outputs and herd replacements. Additionally, the length of the breeding season and the cow:bull ratio were varied to capture a typical range of heterogeneous production systems. For each scenario considered, the results indicated that the likelihood of improving profitability by performing BSE increases as breeding season length decreases and cow:bull ratios increase, despite the relative increase in associated costs from hiring veterinarians to perform BSE. These results are largely driven by the increase in total weight of calves weaned and a decrease in costs associated with the replacement of non-pregnant cows. Overall, these findings provide a plausible financial explanation for why cow-calf producers with different management strategies are more/less willing to perform BSE.