Stocker Cattle Ownership vs. Contract Grazing: a Comparison of Risk-Adjusted Returns

Stocker cattle ownership is compared to contract grazing using stochastic simulation. Returns are evaluated for both cattle owners and caretakers in contract grazing agreements. For caretakers, contract grazing is significantly less risky than cattle ownership. For cattle owners, contracting reduces risk only slightly while significantly reducing expected returns. The authors are Assistant Extension Professor, Department of Agricultural Economics, Mississippi State University; Assistant Professor, Department of Agricultural Economics, University of Georgia; Extension Professor, Department of Agricultural Economics, Mississippi State University; and Professor, Department of Agricultural Economics, Mississippi State University.