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Fed Cattle Marketing: A Field Experiment

Matthew Janzen, Kalyn Coatney (), Daniel Rivera, Ardian Harri, John Michael Riley, Darrell Busby and Matt Groves

No 252844, 2017 Annual Meeting, February 4-7, 2017, Mobile, Alabama from Southern Agricultural Economics Association

Abstract: To improve meat quality and consistency, cattle feeders have moved towards implementing marketing strategies based on visual estimates of physiological characteristics (e.g. 0.5 inches backfat). Recognizing that physiological targets will not necessarily result in profit maximization; this research aims to develop a market timing method accounting for animal growth, output price and cost dynamics to enhance the likelihood of maximizing profit on an individual basis. A natural field experiment in Iowa is utilized to evaluate the potential for the new methodology. One hundred twenty three cattle are randomly assigned into each treatment. The first treatment consists of marketing an individual when it attains a visual estimate of 0.5 inches of backfat (EPM). The second treatment consists of marketing an individual when its value of the marginal product equals marginal factor costs (PMR). Profit between treatments is compared utilizing three methods: realized, uniform carcass base price, and uniform cash prices.

Keywords: Agribusiness (search for similar items in EconPapers)
Pages: 22
New Economics Papers: this item is included in nep-agr, nep-exp and nep-mkt
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Persistent link: https://EconPapers.repec.org/RePEc:ags:saea17:252844

DOI: 10.22004/ag.econ.252844

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