Objectives Understand the advantages and disadvantages of retained ownership.
Understand the difference in risk sharing between leased grazing and custom feeding. Retained ownership also allows producers to spread risk from one production activity to another and from one period of time to another. History reveals that between birth and slaughter someone will often profit from cattle before they reach slaughter weight. If the producer misjudges future market conditions, or if the cattle are not properly contracted, retaining ownership can cause an accumulation of losses rather than profits. When considering retaining ownership through a commercial feedlot, you may have to consider forming a marketing association, cooperative or a partnership to put together enough cattle to meet minimum pen size requirements of the feedlot.