Feeding and the Equilibrium Feeder Animal Price-Weight Schedule
David A. Hennessy
June 2005 [05-WP 395]
The feeder animal price is a derivative in the sense that its value depends upon the price of animals for the consumption market. It also depends upon the biological growth technology and feed costs. Daily maintenance costs are of particular interest to the husbander because they can be avoided through accelerated feeding. In this paper, the optimal feeding path under equilibrium feeder animal prices is established. This analysis is used to gain a better understanding of feeding decisions, regulation in feedstuff markets, and the consequences of genetic innovations. It is shown that days on feed can increase or decrease with a genetic innovation or other improvement in feed conversion efficiency. The structure of comparative prices for feeder animals at different weights, the early slaughter decision, and equilibrium in feeder animal markets are also developed. Feeder animal prices can increase over a weight interval if biological feed efficiency parameters are low over the interval.
Keywords: days on feed, energy use, feed ban, growth hormones, maintenance requirements, ration energy density, veal market.
JEL classification: G1, Q1, Q4
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