Under CAIS as FIDP and AIDA only the change in number of cows are valued at the year end price. If you have ten more cows at the end of 2003 then the beginning then those 10 cows are valued at the year end price of perhaps $800 which reduces your CAIS payout by $8000. Even though the actual value of your cow herd may have dropped by $40,000 or more. Only the feedlots guys win because their inventory is a cash inventory and was sold during the year.
CAIS has a built in problem for cow calf operators who have large non cash inventories of cattle and feed which were never intended for sale but can work to reduce payouts based on the five year olympic average which is calculated soley on cash. Any increases in numbers of cows or bales of feed on hand will reduce your potential CAIS payout in any particular year, yet increases in cows and feed during the previous reference years are ignored creating a built in bias against building up a reference margin.
CAIS has a built in problem for cow calf operators who have large non cash inventories of cattle and feed which were never intended for sale but can work to reduce payouts based on the five year olympic average which is calculated soley on cash. Any increases in numbers of cows or bales of feed on hand will reduce your potential CAIS payout in any particular year, yet increases in cows and feed during the previous reference years are ignored creating a built in bias against building up a reference margin.
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