Financial Management

Profiting from the Cattle Cycle: Alternative Cow Herd Investment Strategies

---

Abstract

Beef cow herd owners can benefit from incorporating price signals into their heifer retention decisions. Whereas a perfect forecast of calf prices over the productive life of the heifer added to the herd would be ideal, such information is not available. However, simple decision rules that incorporate current or recent prices and the knowledge that the cattle cycle likely will repeat itself can help producers improve their investment decisions. A dollar cost averaging strategy that retains the same dollar value of heifers each year and a rolling average value strategy that retains a 10-year average value of heifers out performed strategies that sought to maintain a constant herd size or a constant cash flow.

Keywords: ASL R1753

How to Cite:

Lawrence, J. D., (2002) “Profiting from the Cattle Cycle: Alternative Cow Herd Investment Strategies”, Iowa State University Animal Industry Report 1(1).