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Feeding and the Equilibrium Feeder Animal Price-Weight Schedule

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  • Hennessy, David A.

Abstract

The feeder animal price is a derivative in the sense that its value depends upon the price of animals for the consumption market. It also depends upon the biological growth technology and feed costs. Daily maintenance costs are of particular interest to the husbander because they can be avoided through accelerated feeding. In this paper, the optimal feeding path under equilibrium feeder animal prices is established. This analysis is used to gain a better understanding of feeding decisions, regulation in feedstuff markets, and the consequences of genetic innovations. It is shown that days on feed can increase or decrease with a genetic innovation or other improvement in feed conversion efficiency. The structure of comparative prices for feeder animals at different weights, the early slaughter decision, and equilibrium in feeder animal markets are also developed. Feeder animal prices can increase over a weight interval if biological feed efficiency parameters are low over the interval.

Suggested Citation

  • Hennessy, David A., 2005. "Feeding and the Equilibrium Feeder Animal Price-Weight Schedule," Staff General Research Papers Archive 12365, Iowa State University, Department of Economics.
  • Handle: RePEc:isu:genres:12365
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    File URL: http://www2.econ.iastate.edu/papers/paper_12365.pdf
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    References listed on IDEAS

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    1. Jarvis, Lovell S, 1974. "Cattle as Capital Goods and Ranchers as Portfolio Managers: An Application to the Argentine Cattle Sector," Journal of Political Economy, University of Chicago Press, vol. 82(3), pages 489-520, May/June.
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    Cited by:

    1. Li, Yunhan & Shonkwiler, Scott, 2016. "A Dynamic Model of U. S. Beef Cow Inventories," 2016 Annual Meeting, July 31-August 2, 2016, Boston, Massachusetts 235385, Agricultural and Applied Economics Association.

    More about this item

    JEL classification:

    • G1 - Financial Economics - - General Financial Markets
    • Q1 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture
    • Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy

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