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Management of Intensive Forage-Beef Production Under Yield Uncertainty

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  • Pope, C. Arden
  • Shumway, C. Richard

Abstract

Forage production variability is incorporated into a decision theory framework for a beef producer in East Texas. The results suggest that the least risky, and also the most profitable, approach to intensive forage beef production is to plan for relatively poor weather conditions and low forage production. This results in a more diverse forage system and a smaller herd size than would be found optimal under the assumption of constant average forage production. These results also demonstrate that the assumption of constant average forage production may result in grossly exaggerated estimates of expected net returns.

Suggested Citation

  • Pope, C. Arden & Shumway, C. Richard, 1984. "Management of Intensive Forage-Beef Production Under Yield Uncertainty," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 16(2), pages 37-44, December.
    • Handle: RePEc:cup:jagaec:v:16:y:1984:i:02:p:37-44_01
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    References listed on IDEAS

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    1. P. B. R. Hazell, 1971. "A Linear Alternative to Quadratic and Semivariance Programming for Farm Planning under Uncertainty," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 53(1), pages 53-62.
    2. Gardner, Bruce & Chavas, Jean-Paul, 1979. "Market Equilibrium With Random Production," 1979 Annual Meeting, July 29-August 1, Pullman, Washington 278368, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    3. Bentley, Ernest & Shumway, C. Richard, 1981. "Adaptive Planning Over The Cattle Price Cycle," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 13(1), pages 1-10, July.
    4. P. B. R. Hazell, 1971. "A Linear Alternative to Quadratic and Semivariance Programming for Farm Planning under Uncertainty: Reply," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 53(4), pages 664-665.
    5. Vernon R. Eidman & Gerald W. Dean & Harold O. Carter, 1967. "An Application of Statistical Decision Theory to Commercial Turkey Production," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 49(4), pages 852-868.
    6. Hadar, Josef & Russell, William R, 1969. "Rules for Ordering Uncertain Prospects," American Economic Review, American Economic Association, vol. 59(1), pages 25-34, March.
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    Cited by:

    1. Evans, Jason R. & D'Souza, Gerard E. & Sperow, Mark & Rayburn, Edward B., 2004. "An Economic Analysis Of Pasture-Raised Beef Systems In Appalachia," 2004 Annual meeting, August 1-4, Denver, CO 20268, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    2. Dillon, Carl R., 1992. "Microeconomic Effects Of Reduced Yield Variability Cultivars Of Soybeans And Wheat," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 24(1), pages 1-13, July.
    3. Berger, Ariadna M. & Knoblauch, Wayne A. & Pratt, James E., 1999. "Management Strategies, Risk Considerations and Herd Size Analysis for Optimal Resource Allocation in Argentine Dairy Farms," Research Bulletins 122680, Cornell University, Department of Applied Economics and Management.

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