publication . Preprint . 1993

Expectations of Cattle Feeding Investors in Feeder Cattle Placements

Kastens, Terry L.; Schroeder, Ted C.;
Open Access
  • Published: 01 Jul 1993
Cattle feeders appear irrational when they place cattle on feed when projected profits are negative. Long futures positions appear to offer superior returns to cattle feeding investment. Cattle feeder behavior suggests that they believe a downward bias in live cattle futures persists and that cattle feeders use different information than the live cattle futures market price when making placement decisions. This paper examines feeder cattle placement determinants and compares performance of expected hedgeable profits with past actual profits in explaining feeder cattle' placements. Past actual profits are found to be more important placement determinants than exp...
free text keywords: Livestock Production/Industries,

8 Our data set covers cattle placed through May 17, 1993. Actual profits for cattle placed on feed after January 4, 1993 would become available after May 17, 1993, which is beyond our data period . Therefore, the models in table 3 only include cattle placed through January 4, 1993.

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