August 23, 2022

University team gets grant to study price risk management tools for US beef cattle producers

A University of Tennessee Institute of Agriculture research team has been awarded a US$650,000 grant to explore innovative price risk management tools and ultimately help beef cattle producers in the United States make informed and effective risk management decisions.

The researchers will conduct a national survey of beef cattle producers to identify barriers to adopting price risk management tools, assess perceptions of tool effectiveness and learn how these tools could be changed to be more usable — the first known study to ascertain this vital information.

Beef producers will also be asked how hypothetical changes to risk management tools would affect subsequent adoption.

Survey results will inform the data-driven development of a free mobile application containing information needed for making informed and effective risk management decisions. The long-term goal of this project is to improve US beef cattle producers' economic sustainability through research on and education of price risk management, especially for producers with small- and medium-sized operations.

"We are thankful for the opportunity to ask US beef cattle producers about ways to help them reduce losses from sudden price declines," said Chris Boyer, associate professor and lead researcher in the Department of Agricultural and Resource Economics. "This survey is simply about gathering information to better serve US beef producers through education, policy design and making information easily available through a mobile application."

In addition to Boyer, team members include Karen DeLong, Andrew Griffith and Charley Martinez, all from the Department of Agricultural and Resource Economics.

The three-year grant is funded by United States Department of Agriculture's National Institute of Food and Agriculture, which provides leadership and funding for programmes that advance agriculture-related sciences.

Hongwei Xin, dean of UT AgResearch, praised the researchers for focusing their efforts on tools that will help small- and medium-sized operations.

"These ranchers are the backbone of the US beef economy," he said. "Anything we can do to help their profitability helps all US producers and consumers."

- UTIA