STOCHASTIC SIMULATION OF A SMALL-SCALE MEAT PACKING PLANT

A small-scale meat packing plant selling lambs and steers in northern New Mexico was analyzed in three Monte Carlo simulations. The monthly distributions of steer liveweights and prices at the feedlot were fit and the parameters estimated. The distributions were correlated between liveweights and prices each month and between all monthly prices. An annual distribution of lamb liveweights was also fit. The three simulations assumed that retail prices of beef in northern New Mexico were comparable to the national average, minimum and maximum weighted prices. If minimum national beef prices are used, there is a better than 50 percent probability that net profits will be negative every month except June-September. In January-May and November, there is a greater than 90 percent chance that net profits before taxes will be negative. When maximum prices are used there is a slight chance that net profits before taxes will be negative.