Optimal Contracting for Cattle Feeding: An Assessment of Climatic Conditions

A unique approach using a biophysical growth model from the animal science literature is used to examine optimal contract cattle feeding behavior under alternative climatic conditions. The examination of incentives and outcomes in an unusually comprehensive contract parameter and behavioral space is made possible by combining simulated feedlot and carcass performance of a large set of cattle with public price and weather data. The model uniquely fits typical risk aversion levels and rationalizes existing contract types. The results show that optimal cattle feeding contract varies with climatic condition, but there is a tendency to replace cost-of-gain contracts with yardage-feed contracts as grid pricing has emerged.


Issue Date:
May 03 2010
Publication Type:
Conference Paper/ Presentation
DOI and Other Identifiers:
Record Identifier:
https://ageconsearch.umn.edu/record/61451
PURL Identifier:
http://purl.umn.edu/61451
Total Pages:
47
JEL Codes:
D80
Series Statement:
Selected Paper
11460




 Record created 2017-04-01, last modified 2020-10-28

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