The objective of this paper is to investigate the fact that an increase in risk exposure gives negative effects on the expansion of the calf-raising farm size by using a dynamic econometric model. It is empirically known that the calf-raising farms facing the risk of calf price fluctuation tend to reduce the number of beef cows to escape a shrink in their future profitability; however, most previous studies on beef production have not discussed how uncertainty concerning prices affects the investment behavior of risk-averse producers because of their intending to analyze the mechanism of beef cycle. The main findings from the empirical results of this study imply that a ratio of risk premium to the expected calf price is 17.2% during the period calf price goes down drastically. The ratio of 17.2% is greater than the ones which are estimated in the previous studies as the case of the rice and dairy farms. In addition, a result of the decomposition analysis of the investment behavior indicates that uncertainty concerning prices induces risk averse farmers to reduce the farm size in the observation period; therefore，the variance of calf prices has significant effects on the farm size expansion as well as the expected value of calf prices.