An Uncertain Market: A Case Study of a Cow-Calf Operation

J. Ross Pruitt, Joshua Detre and Paul M. Darby

Journal of the ASFMRA, 2014, vol. 2014, 18

Abstract: This case study uses current dynamics in the U.S. beef cattle industry to illustrate the use of financial analysis tools such as net present value in making investment decisions. Two problems face the livestock producer in this case study: 1) should the producer purchase replacement females or keep existing unbred females; and 2) should the producer expand his operation in terms of both land and cows. Students are asked to estimate a net present value (NPV) for both investment decisions. These NPVs should account for risk as prices in the beef cattle sector are anything but certain.

Keywords: Livestock Production/Industries; Research and Development/Tech Change/Emerging Technologies (search for similar items in EconPapers)
Date: 2014
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Persistent link: https://EconPapers.repec.org/RePEc:ags:jasfmr:197096

DOI: 10.22004/ag.econ.197096

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