Cow-Calf Producer Risk Preference Impacts on Retained Ownership Strategies

Kelsey Frasier Pope, Ted C. Schroeder, Michael Langemeier and Kevin L. Herbel

Journal of Agricultural and Applied Economics, 2011, vol. 43, issue 04

Abstract: Considerable efforts have been made to provide cow-calf producers with information to help them make informed decisions about adding value to calves. Despite demonstrated market incentives to retain calves, many producers still sell right after weaning. We postulate this observed behavior is related to producer risk aversion. Our study concludes risk aversion is an important factor affecting calf retention as the most risk-averse producers have more than a 60% probability of selling calves at weaning and the most risk tolerant have less than a 20% probability of selling at weaning.

Keywords: cow-calf producers; ordered probit; retained ownership; risk aversion; Farm Management; Marketing; Q13; C25; D18 (search for similar items in EconPapers)
Date: 2011
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