The Role of Price Risk Management in Mitigating Fed Cattle Profit Exposure

Eric J. Belasco

Journal of Agricultural and Resource Economics, 2008, vol. 33, issue 3

Abstract: This study identifies the amount and origin of risk in cattle feedlot operations through the use of simulation techniques. Ex ante profit risks are evaluated under scenarios with varying levels of price protection through the use of forward pricing. An empirical probability density function is simulated to capture the mean and variability in prices and cattle production yields within a specified profit under difference assumptions regarding the relative importance of production risk and price risk in overall cattle feeding profits.

Keywords: Corn prices; livestock production; multivariate simulation; Livestock Production/Industries; Risk and Uncertainty (search for similar items in EconPapers)
Date: 2008
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Persistent link: http://EconPapers.repec.org/RePEc:ags:jlaare:46563

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