IDENTIFYING ECONOMIC RISK IN CATTLE FEEDING

Closeout data from two western Kansas commercial feedlots are examined to determine how cattle prices, feed costs, and animal performance impact the variability of cattle feeding profits. The relative impacts of these factors are studied across sex, placement weight, and placement month using standardized beta coefficients. Feeder cattle prices have a greater impact on profit variability for spring and fall placements. The effect of animal performance on variability of cattle feeding profits is greater for fall placements. Results suggest that fed cattle and feeder cattle prices should be emphasized in managing the overall risk in cattle feeding because they are the largest contributors to profit variability.