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Abstract

Reasonably high stocking densities generally lead to high profit for steer grazing enterprises. However, higher stocking densities result in high microbial counts, creating food safety concerns, especially with the advent of BSE in recent years. This study explores the impact of production and output price uncertainty on optimal stocking density when microbial shedding presents a food safety problem. The optimal grazing pressure is based on the expected utility maximization framework, and a stochastic linear response and plateau production function. Results show that uncertainty and food safety problems lead to lower stocking density, and lower profits. However, reducing the potential incidence of microbial shedding guarantees future profits to the enterprise, and continuity in production.

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