Optimal Contracting for Cattle Feeding: An Assessment of Climatic Conditions

Shaikh Mahfuzur Rahman

No 61451, 2010 Annual Meeting, July 25-27, 2010, Denver, Colorado from Agricultural and Applied Economics Association

Abstract: A unique approach using a biophysical growth model from the animal science literature is used to examine optimal contract cattle feeding behavior under alternative climatic conditions. The examination of incentives and outcomes in an unusually comprehensive contract parameter and behavioral space is made possible by combining simulated feedlot and carcass performance of a large set of cattle with public price and weather data. The model uniquely fits typical risk aversion levels and rationalizes existing contract types. The results show that optimal cattle feeding contract varies with climatic condition, but there is a tendency to replace cost-of-gain contracts with yardage-feed contracts as grid pricing has emerged.

Keywords: Industrial; Organization (search for similar items in EconPapers)
Pages: 47
Date: 2010-05-03
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea10:61451

DOI: 10.22004/ag.econ.61451

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