Profitability and Risk of Retained Ownership of Beef Calves

Frank Novak, James Eales and Earl Munro

No 232371, Project Report Series from University of Alberta, Department of Resource Economics and Environmental Sociology

Abstract: This study investigates the risk and return of retained ownership of steer calves past weaning, in Alberta. The study is approached using an historical simulation. The base simulation model is based on a producer retaining 100 beef steers every fall for the years 1979 to 1991. There are three weaning weights examined being four hundred and fifty, five hundry and fifty and six hundred and fifty pounds. In additition to the base model a further simulation is developed to examine selective hedging strategies. Participation in the National Tripartite Stabilization Program has been a benefit to producers who retain ownership, both in terms of increased return and decreased risk. Selective hedging strategies, based on a target return, can increase returns and decrease the level of risk. A routine hedge was not found to be a successful risk management tool over long production horizons.

Keywords: Livestock Production/Industries; Risk and Uncertainty (search for similar items in EconPapers)
Pages: 109
Date: 1993
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Persistent link: https://EconPapers.repec.org/RePEc:ags:ualbpr:232371

DOI: 10.22004/ag.econ.232371

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