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Effect of Risk Aversion on Feeder Cattle Prices

  • Jung-Hee Lee (a1) and B. Wade Brorsen (a2)

Abstract

This paper determines the effects of cattle feeders' risk aversion on feeder cattle prices using pen data of Kansas feedlots. Higher profit risk results in lower feeder cattle prices. The elasticity of feeder cattle price with respect to profit risk was small (-0.013). The risk elasticity estimated here is similar to risk elasticities in previous studies and thus, the use of pen-level data does not seem to add much to the study of risk.

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Keywords

Effect of Risk Aversion on Feeder Cattle Prices

  • Jung-Hee Lee (a1) and B. Wade Brorsen (a2)

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