Cattle as Capital Goods and Ranchers as Portfolio Managers: An Application to the Argentine Cattle Sector

Jarvis, Lovell S.

doi:10.1086/260209

Cited by 188 publications

(89 citation statements)

References 1 publication

Supporting

Mentioning

Contrasting

Unclassified

Order By: Relevance

“…Jarvis (1974) and, more recently, Rosen, Murphy and Sheinkman (1994) demonstrate that gestation lags in livestock production can generate cycles in livestock prices and assets. Fafchamps (1996) shows that, in the presence of common access to pasture, sales and losses of livestock during droughts raise the expected returns to surviving animals η _ (s t ).…”

Section: A Model Of Livestock As Buffer Stockmentioning

confidence: 99%

Drought and Saving in West Africa: Are Livestock a Buffer Stock?

Fafchamps

Udry²,

Czukas

1998

SSRN Journal

View full text Add to dashboard Cite

Households in the west African semi-arid tropics, as in much of the developing world, face substantial risk --an inevitable consequence of engaging in rainfed agriculture in a drought-prone environment. It has long been hypothesized that these households keep livestock as a buffer stock to insulate their consumption from fluctuations in income. This paper has the simple goal of testing that hypothesis. Our results indicate that livestock transactions play less of a consumption smoothing role than is often assumed. Livestock sales compensate for at most thirty percent, and probably closer to twenty percent of income shortfalls due to village-level shocks alone. We discuss possible explanations for these results and suggest directions for future work.

show abstract

Section: A Model Of Livestock As Buffer Stockmentioning

confidence: 99%

Drought and Saving in West Africa: Are Livestock a Buffer Stock?

Fafchamps

Udry²,

Czukas

1998

SSRN Journal

View full text Add to dashboard Cite

show abstract

“…More details of the investment decision model which underlies the specified supply relations are provided in earlier applications of the theory to livestock supply studies by Jarvis (1967Jarvis ( , 1974, Court (1967) and Freebairn (1973). In this exposition only the basic theoretical core is presented, and concentration is directed to the behavioural postulates embodied in the theory.…”

Section: Economic Theory Of Capital and Investmentmentioning

confidence: 99%

Supply Response in the Australian Sheep Industry: A Case for Disaggregation and Dynamics*

Reynolds¹,

Gardiner²

1980

Australian Journal of Agricultural Economics

View full text Add to dashboard Cite

A.Microeconomic capital goods theory was utilised to provide a theoretical framework on which a dynamic econometric model was based. Econometric procedures were then employed in an analysis of sheep producers' decision making regarding the annual supplies of wool, lamb and mutton, and annual changes in the inventory levels of sheep, lambs and ewes maintained for breeding purposes.Estimates show that wool prices provide the long-run stimulus for increases and decreases in the sheep flock while mutton and lamb prices are responsible for short-run changes in flock composition. Substitution between sheep and beef cattle is of considerable importance although no significant substitution between sheep and cropping could be found. Seasonal conditions proved to be an important short-run supply shifter, affecting both numbers and composition of the sheep flock.Introduction This study focuses on annual production and inventory decisions of Australian sheep producers by modelling producer behaviour in the context of capital theory. The central theme of the paper is simple. Sheep are considered to be capitai goods and producers are viewed as portfolio managers. In any period the producer of a good is faced with the problem of maximising some objective function (profit, utility) given some level of input costs, an anticipated output price and an initial stock of capital (fixed productive resources).In the livestock sector there are factors other than prices that impinge upon production; e.g. seasonal conditions and biological constraints on output. Thus, any model which purports to explain a production decision within the livestock sector must explicitly account for all three elements of that decision; i.e. the demographic constraint, the economic decision and the modification of the decision caused by exogenous influences. The model outlined in this paper is intended to account for each

show abstract

“…There is a long history of using cattle as part of a capital portfolio in developing countries and in Latin America in particular (Jarvis, 1974;Zimmerman and Carter, 2003). The flexibility, liquidity, and "low risk" nature of cattle, relative to plantations and crops, may explain why cattle ranching continues despite reforestation incentives.…”

mentioning

confidence: 99%

Teak–cattle production tradeoffs for Panama Canal Watershed small scale producers

Stefanski

Shi

Hall

et al. 2015

Forest Policy and Economics

View full text Add to dashboard Cite

Reforestation and forest conservation are important issues in the Panama Canal Watershed (PCW). Uncertainty remains about relative net benefits of profit-maximizing timber rotations compared to the net present value of incumbent land uses such as cattle ranching. The scientific and popular literatures have displayed enthusiasm for teak (Tectona grandis) and native species plantations. We estimate a realistic yield model for teak, an exotic tree species, based on growth data from actual small scale landholders who were incentivized to convert lands to teak plantations. We use a suite of well fit yield models to solve for the optimal Faustmann rotation and compute the net present value (NPV) of a teak plantation to a private land manager as a starting point for understanding land-use patterns. We compare the NPV from forestry to cattle and find that site characteristics, discount rates, and market prices are all important factors in influencing the land manager's decision to switch from cattle ranching to plantation forestry. We find that traditional cattle ranching is economically competitive, in terms of NPV, with and may often outperform teak plantations within the PCW. This result is robust to the teak yield model selected.

show abstract

Cattle as Capital Goods and Ranchers as Portfolio Managers: An Application to the Argentine Cattle Sector

Cited by 188 publications

References 1 publication

Drought and Saving in West Africa: Are Livestock a Buffer Stock?

Drought and Saving in West Africa: Are Livestock a Buffer Stock?

Supply Response in the Australian Sheep Industry: A Case for Disaggregation and Dynamics*

Teak–cattle production tradeoffs for Panama Canal Watershed small scale producers

Contact Info

Product

Resources

About