83. Mapping the Feedback Architecture of U.S. Cow-calf Profitability Using Causal Loop Diagrams.

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ID: 330255
2026
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Abstract
Abstract Profitability in U.S. cow-calf operations emerges from the dynamic interplay of biological constraints, economic pressures, and market signals rather than from simple input-output transactions, yet most decision-support tools rely on static partial budgets or linear optimization models that cannot accommodate temporal delays and feedback-rich behavior. Existing system dynamics (SD) studies of beef cattle systems have largely focused on herd inventory dynamics or broad supply-chain modeling, leaving the internal financial structure of the cow-calf enterprise, specifically stakeholder cash flows and reinvestment dynamics, underspecified. This study addresses that gap by developing a qualitative SD model that maps profitability as a function of system structure rather than as a static outcome. A Causal Loop Diagram (CLD) was constructed using a literature-grounded approach informed by established SD conventions, prior cattle-cycle modeling and 2024 USDA production cost benchmarks. A formal dynamic hypothesis proposes that herd expansion is driven by interacting reinforcing feedback processes, biological reproduction, profit reinvestment, market-driven growth, and genetic improvement, which eventually activate balancing feedbacks through rising feed costs, market price corrections, and consumer demand elasticity. The resulting CLD, implemented in Vensim, comprises seven reinforcing loops and five balancing loops that operationalize this hypothesis across the full cow-calf production system. The CLD reveals three structurally distinct behavioral modes. During expansion phases, reinforcing loops dominate: biological reproduction (R1) compounds calf output annually, while profit reinvestment (R2) and market-driven growth (R3–R4) recycle revenue into heifer retention and infrastructure, accelerating herd growth beyond what biological potential alone would generate. As herd inventories rise, balancing loops gain strength: feed cost feedbacks (B1–B2) compress margins, and calf and cow market price corrections (B3–B4) impose supply-demand discipline. Consumer demand elasticity at retail (B5) functions as the terminal shock absorber, dampening price divergence that originates upstream. The interaction of these loop families generates the S-shaped growth trajectory and cyclical boom-bust dynamics characteristic of the U.S. cattle cycle. The biological delays embedded across production stages mean that live-animal supply responses to market price signals lag by one to two years, creating persistent structural conditions for overshoot and collapse that static economic analyses cannot detect. This CLD establishes that cyclical volatility and profitability contraction in U.S. cow-calf systems are endogenously generated by the system's own feedback architecture, with stakeholder cash flows and reinvestment dynamics playing a central role, rather than purely by external shocks such as drought or feed price spikes. Heifer retention and reinvestment thresholds emerge as primary leverage points where targeted management yields more durable financial improvements than reactive price-signal responses. The next phase will translate the CLD into a fully parameterized stock-and-flow simulation in Vensim, incorporating producer heterogeneity and scenario-based policy testing, with the goal of developing a decision-support tool for U.S. beef producers. For image description, please refer to the figure legend and surrounding text.
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openalex_W7214725126 Use this key to autocite in the manuscript while using SciMatic Manuscript Manager or Thesis Manager
Authors
Journal italian journal of animal science
Year 2026
DOI
10.1093/jas/skag272.233
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