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Quality Risk and Profitability in Cattle Production: A Multivariate Approach

Author

Listed:
  • Belasco, Eric J.
  • Schroeder, Ted C.
  • Goodwin, Barry K.

Abstract

This study evaluates quality, production, and price risk within the context of overall profit variability in fed cattle production. The approach used offers a flexible way to estimate a large system of equations with more than three jointly related censored outcomes. Trade-offs between quality and yield grade levels and production measures, such as average daily gain and feeding efficiency, are evaluated. Simulation procedures are used to assess the impact of quality risk on overall profit variability. Results make an important contribution to existing research by explaining why price signals through grid quality grade premiums may not generate intended producer responses.

Suggested Citation

  • Belasco, Eric J. & Schroeder, Ted C. & Goodwin, Barry K., 2010. "Quality Risk and Profitability in Cattle Production: A Multivariate Approach," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 35(3), pages 1-21, December.
    • Handle: RePEc:ags:jlaare:97854
    DOI: 10.22004/ag.econ.97854
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    Cited by:

    1. Scott W. Fausti & Zhiguang Wang & Bashir A. Qasmi & Matthew A. Diersen, 2014. "Risk and marketing behavior: pricing fed cattle on a grid," Agricultural Economics, International Association of Agricultural Economists, vol. 45(5), pages 601-612, September.
    2. Jan SYRUCEK & Jindrich KVAPILIK & Ludek BARTON & Mojmir VACEK & Ludek STADNIK, 2017. "Economic efficiency of suckler cow herds in the Czech Republic," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 63(1), pages 34-43.
    3. Songjiao Chen & William W. Wilson & Ryan Larsen & Bruce Dahl, 2015. "Investing in Agriculture as an Asset Class," Agribusiness, John Wiley & Sons, Ltd., vol. 31(3), pages 353-371, June.
    4. Scott W. Fausti & Zhiguang Wang & Bashir A. Qasmi & Matthew A. Diersen, 2014. "Risk and marketing behavior: pricing fed cattle on a grid," Agricultural Economics, International Association of Agricultural Economists, vol. 45(5), pages 601-612, September.

    More about this item

    Keywords

    Livestock Production/Industries;

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