Sell It Now or Later? A Decision-making Model for Feeder Cattle Selling

Abstract

We study the decision-making process of the selling of feeder cattle. For a specific feeder cattle, we strive to answer the following question: whether to sell the cattle in spring or fall to maximize the profits of farmers? To this end, we first construct an empirical pricing model based on a series of related covariates including: market conditions, lot characteristics, quality characteristics, color and seasonality. Then, based on the empirical pricing model, we estimate both the profits of selling the cattle in spring, and in fall. Comparing the two expected profits, we can help guide the decision making of farmers. By applying our decision-making method to a real-world feeder cattle market dataset, we show that 55.33% of the cattle sold in fall can bring more profits if they could be sold in spring.