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Cow-Calf Producer Risk Preference Impacts on Retained Ownership Strategies

Published online by Cambridge University Press:  26 January 2015

Kelsey Frasier Pope ,
Ted C. Schroeder ,
Michael R. Langemeier  and
Kevin L. Herbel
Kelsey Frasier Pope
Affiliation:
Nebraska Corn Board, Lincoln, Nebraska (former graduate research assistant, Kansas State University)
Ted C. Schroeder
Affiliation:
Kansas State University, Manhattan, KansasKansas Farm Management Association Administrator, Kansas State University, Manhattan, Kansas
Michael R. Langemeier
Affiliation:
Kansas State University, Manhattan, KansasKansas Farm Management Association Administrator, Kansas State University, Manhattan, Kansas
Kevin L. Herbel
Affiliation:
Kansas State University, Manhattan, KansasKansas Farm Management Association Administrator, Kansas State University, Manhattan, Kansas
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Abstract

Considerable efforts have been made to provide cow-calf producers with information to help them make informed decisions about adding value to calves. Despite demonstrated market incentives to retain calves, many producers still sell right after weaning. We postulate this observed behavior is related to producer risk aversion. Our study concludes risk aversion is an important factor affecting calf retention as the most risk-averse producers have more than a 60% probability of selling calves at weaning and the most risk tolerant have less than a 20% probability of selling at weaning.

Keywords

cow-calf producersordered probitretained ownershiprisk aversionQ13C25D18
Type
Research Article
Information
Journal of Agricultural and Applied Economics , Volume 43 , Issue 4 , November 2011 , pp. 497 - 513
Copyright
Copyright © Southern Agricultural Economics Association 2011

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