Recent Changes in Profitability Determinants for Cattle Feeders

The evolution of the factors that impact profitability will always be of concern for agribusiness firms. The cattle feeding industry is continually evolving as a result of technological advancements and evolving population genetics aimed to meet consumer demand. To empirically identify and make relevant the potential for changing importance of various profit components, symmetric variables and standardized betas were directly compared to research conducted in the 1990’s using a more recent data series ranging from 2005 to 2013. The results of the analysis indicate that output prices of fed cattle and input prices of feeder cattle, though still the most influential, are now less impactful to feedlot profits relative to animal performance variables (e.g. average daily gain and feed-to-gain). These results provide intuitive reasoning for the recent development and use of beta agonists to mitigate the risk of lower performance, at the potential cost of negatively impacting consumer demand.

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Conference Paper/ Presentation
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JEL Codes:
Q12; Q13; D24

 Record created 2017-04-01, last modified 2018-01-23

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