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Contract Grazing on Winter Annuals: Risks and Returns for Cattle Owners

Author

Listed:
  • Anand, Manik
  • Duffy, Patricia A.
  • Bergtold, Jason S.
  • Bransby, David
  • Shoemaker, Carla

Abstract

Critical factors affecting risk and profitability for cattle owners under contract grazing include cattle weight at purchase and time spent on pasture and feedlot. Buying lighter animals and placing them in pastures before sending them to feedlot is the most profitable as well as least risky option. Even in the least risky scenario, the cattle owner would still incur losses 28% of the times. The results also show a possibility that at contract-grazing rates of $0.41 per pound of gain or more, the cattle owner would place cattle directly on the feedlot, bypassing the pasture.

Suggested Citation

  • Anand, Manik & Duffy, Patricia A. & Bergtold, Jason S. & Bransby, David & Shoemaker, Carla, 2011. "Contract Grazing on Winter Annuals: Risks and Returns for Cattle Owners," 2011 Annual Meeting, February 5-8, 2011, Corpus Christi, Texas 98752, Southern Agricultural Economics Association.
  • Handle: RePEc:ags:saea11:98752
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    File URL: http://purl.umn.edu/98752
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    Keywords

    contract grazing; risks; returns; Farm Management; Livestock Production/Industries; Q12;

    JEL classification:

    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets

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