Modeling the Cattle Replacement Decisions

In this paper we evaluate the performance of a dynamic model of cattle replacement and culling decisions. We derive the price of cattle when it is treated as a unit of capital and evaluate various rates of adjustment of the cattle herd to determine the length of the cattle cycle. Replacement decision is modeled as the solution to a dynamic optimization problem where the breeding herd is viewed as a capital asset that is capable of producing two outputs: calves and culled cows. The own-price, replacement and interest rate elasticities calculated for both the short-run and long-run time-frames suggest fairly rapid adjustment rates. Tests of cycle length revealed a 14-year cattle cycle.


Issue Date:
2003
Publication Type:
Conference Paper/ Presentation
PURL Identifier:
http://purl.umn.edu/21960
Total Pages:
25
Series Statement:
Selected Paper




 Record created 2017-04-01, last modified 2017-11-20

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