An analysis of variations in the annual inventory of beef cows and heifers at the regional level in New South Wales using Just's adaptive risk model is reported. The State has been divided into six relatively homogeneous regions for the purposes of the study. Wherever significant coefficient estimates are obtained, inventories in the various regions are positively related to expected beef price and the variance of prices of alternative commodities and negatively related to expected prices of alternative commodities and the variance of beef price. Some of the limitations of the adaptive risk model in analysing the beef industry are discussed.