This study evaluates quality, production, and price risk within the context of overall
profit variability in fed cattle production. The approach used offers a flexible way to
estimate a large system of equations with more than three jointly related censored
outcomes. Trade-offs between quality and yield grade levels and production measures,
such as average daily gain and feeding efficiency, are evaluated. Simulation procedures
are used to assess the impact of quality risk on overall profit variability. Results make an
important contribution to existing research by explaining why price signals through grid
quality grade premiums may not generate intended producer responses.
