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ARS Home » Plains Area » Miles City, Montana » Livestock and Range Research Laboratory » Research » Publications at this Location » Publication #90665
Title: RETAINED OWNERSHIP: A MANAGEMENT STRATEGY FOR COW-CALF PRODUCERS TO INCREASE PROFITABILITY

Author
item Macneil, Michael
item VAN TASSELL, L - UNIVERSITY OF WYOMING
item MCNELEY, S - UNIVERSITY OF WYOMING
item Short, Robert
item Grings, Elaine

Submitted to: Governors Conference on the State of the Livestock Industry
Publication Type: Other
Publication Acceptance Date: 8/1/1997
Publication Date: N/A
Citation: N/A

Interpretive Summary: Increasing profit and reducing risk are familiar challenges for beef producers. Retained ownership is one management strategy that may help producers meet these challenges while also reaping rewards of a sound breeding program. Individual producers vary in their aversion to risk. In this study, risk-neutral producers were found to retain ownership of calves longer than risk-adverse producers. Genetic potential for growth of the calves modified producer behavior causing them to sell moderate growth potential calves at earlier points in the beef production process than calves with greater growth potential. Income was higher, but more variable, for risk-neutral producers than risk-adverse ones and for high growth potential calves relative to those with less potential for growth. These results illustrate consequences of some decisions made by beef producers in search of greater profit while also reducing risk.

Technical Abstract: Increasing profit and reducing risk are familiar challenges for beef producers. Retained ownership is one management strategy that may help producers meet these challenges while also reaping rewards of a sound breeding program. Individual producers vary in their aversion to risk. In this study, risk-neutral producers were found to retain ownership of calves longer than risk-adverse producers. Genetic potential for growth of the calves modified producer behavior causing them to sell moderate growth potential calves at earlier points in the beef production process than calves with greater growth potential. Income was higher, but more variable, for risk-neutral producers than risk-adverse ones and for high growth potential calves relative to those with less potential for growth. These results illustrate consequences of some decisions made by beef producers in search of greater profit while also reducing risk.