Foundations of Virtual Fencing: Economics of Virtual Fence (VF) Systems

Abstract

This analysis explores the economic considerations of investing in virtual fence (VF) systems, examining their application for representative cow-calf operations under different operating conditions. Virtual fencing (VF) is a tool for livestock management that uses collars and a radio or cellular systems to influence the movement of livestock using auditory and electrical cues (Antaya et al. 2024). Users program the system to establish invisible barriers on a landscape. The system detects the location of animals and if animals approach or cross a “virtual” fence, they receive an auditory or electrical cue encouraging them to move away from the barrier. VF systems have the potential to offset physical fencing costs, enable adoption of adaptive management practices (Boyd et al. 2022; Boyd et al. 2023; Golinski et al. 2023; Verdon et al. 2021), and save ranchers time in locating animals, among other benefits (Campbell et al. 2018; Boyd et al. 2022; Schillings et al. 2024). Commercial VF systems have varying fee structures and require labor to operate which is an additional cost of adoption. Cost and economies of scale are factors that affect livestock producers’willingness to adopt technologies (Pruitt et al. 2012; Lima et al. 2018).