Overview:

Many risks confront beef operations. Students examine production, financial, and marketing risks.

Production risk can come in the form of death loss, feed conversion efficiency or carcass quality. These are affected by weather, disease, pests, genetic variability, and feed quality. Market and price risk can come from the variability in both commodity prices and input prices. It can also come in the form of changes in supply of and demand for the end product being produced. Financial risk management, the subject of this chapter, focuses on the combined effects of both price and production risk and the interrelationship of profits, net worth and cash flow.

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