Profit Maximizing Behavior On the Fed Cattle Grid: The Value of Pre-harvest and Genetic Sorting with Implications for Aggregate Supply

Chia-Hsing Wang and Brian Roe

No 20611, 2001 Annual meeting, August 5-8, Chicago, IL from American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association)

Abstract: We simulate the growth and quality changes for pens of cattle and derive the value of pre-harvest sorting and genetic selection under grid pricing in a deterministic setting featuring animals with heterogeneous growth and quality maturation paths. The key findings are: 1) both pre-harvest sorting and increased genetic uniformity could substantially affect an individual cattle feeder's net revenues; 2) one could expect higher marginal revenue gains from the genetic uniformity than from pre-market sorting; 3) both methods exhibit diminishing marginal returns and 4) aggregate beef supply may increase as improving uniformity typically leads to later optimal marketing dates and, hence, heavier animals at slaughter.

Keywords: Livestock; Production/Industries (search for similar items in EconPapers)
Pages: 19
Date: 2001
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea01:20611

DOI: 10.22004/ag.econ.20611

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