Uncertainty and Flexibility in the Brazilian Beef Livestock Sector: the Value of the Confinement Option
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Data de Publicação: | 2015 |
Outros Autores: | , , |
Tipo de documento: | Artigo |
Idioma: | eng por |
Título da fonte: | BBR. Brazilian Business Review (English edition. Online) |
Texto Completo: | http://www.bbronline.com.br/index.php/bbr/article/view/177 |
Resumo: | In this work, the value of existing operational flexibility is evaluated, its emergence being attributable to the Brazilian livestock alternatives for cattle fattening, i.e. by maintenance in pasture or through confinement. This crucial sector of the Brazilian economy, the second largest in the world, is highly fragmented, features low return margins and is subject to significant uncertainty factors. Confinement increases cattle fattening speed and when compared against maintenance in pasture it maximizes return on investment for farmers. In spite of this, confinement decision making is dependent upon appropriate time management. Confinement also poses risks related to the volatility of feed costs. Through the Real Options management methodology, assessment of financial growth in livestock fattening is directly linked to flexibility of timing in the transfer of cattle from pasture to confinement, with the presence of associated uncertainties. The results indicate that there is a significant increase in financial returns through containment, calculated using the return per head system. They also point to the importance of correct confinement timing to maximize returns. |
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Uncertainty and Flexibility in the Brazilian Beef Livestock Sector: the Value of the Confinement OptionIncerteza e Flexibilidade na Pecuária de Corte Brasileira: o Valor da Opção de ConfinamentoReal OptionsBeef Cattle SectorManagerial FlexibilityFinancial ValuationOpções ReaisPecuária de CorteFlexibilidade GerencialAvaliação FinanceiraIn this work, the value of existing operational flexibility is evaluated, its emergence being attributable to the Brazilian livestock alternatives for cattle fattening, i.e. by maintenance in pasture or through confinement. This crucial sector of the Brazilian economy, the second largest in the world, is highly fragmented, features low return margins and is subject to significant uncertainty factors. Confinement increases cattle fattening speed and when compared against maintenance in pasture it maximizes return on investment for farmers. In spite of this, confinement decision making is dependent upon appropriate time management. Confinement also poses risks related to the volatility of feed costs. Through the Real Options management methodology, assessment of financial growth in livestock fattening is directly linked to flexibility of timing in the transfer of cattle from pasture to confinement, with the presence of associated uncertainties. The results indicate that there is a significant increase in financial returns through containment, calculated using the return per head system. They also point to the importance of correct confinement timing to maximize returns.Neste trabalho, é avaliado o valor da flexibilidade operacional existente na pecuária brasileira advinda da alternativa para engorda de gado, por manutenção deste no pasto ou pelo confinamento. Esse importante setor da economia brasileira, segundo maior no mundo, é altamente pulverizado, apresenta pequenas margens de retorno e é sujeito a significativos fatores de incerteza. O confinamento, que aumenta a velocidade de engorda do gado quando comparada à manutenção deste no pasto, pode maximizar o retorno financeiro do pecuarista. Mas, para isso, a decisão de confinamento precisa ser tomada no momento correto. O confinamento também apresenta riscos relacionados à volatilidade dos custos de alimentação. Por meio da metodologia de opções reais, é avaliado o incremento de valor financeiro do negócio de engorda de gado advindo da flexibilidade existente de escolha do timing correto para transferir o gado do pasto para confinamento em presença das incertezas associadas. Os resultados indicam que há um incremento de retorno financeiro significativo proporcionado pela opção de confinamento, calculado como retorno por cabeça de gado. Estes também apontam para a importância do timing correto do confinamento de forma a maximizar o retorno. FUCAPE Business Shool2015-11-01info:eu-repo/semantics/articleinfo:eu-repo/semantics/publishedVersionPeer-reviewed ArticleArtigo revisado pelos paresapplication/pdfapplication/pdfhttp://www.bbronline.com.br/index.php/bbr/article/view/17710.15728/bbr.2015.12.6.5Brazilian Business Review; Vol. 12 No. 6 (2015): November to December 2015; 100-120Brazilian Business Review; v. 12 n. 6 (2015): Novembro a Dezembro de 2015; 100-1201808-23861807-734Xreponame:BBR. Brazilian Business Review (English edition. Online)instname:Fucape Business School (FBS)instacron:FBSengporhttp://www.bbronline.com.br/index.php/bbr/article/view/177/265http://www.bbronline.com.br/index.php/bbr/article/view/177/266Bastian-Pinto, Carlos de LamareRamos, Alexandre Paula SilvaOzorio, Luiz de MagalhãesBrandão, Luiz Eduardo Teixeirainfo:eu-repo/semantics/openAccess2018-10-31T19:07:01Zoai:ojs.pkp.sfu.ca:article/177Revistahttps://www.bbronline.com.br/index.php/bbr/indexONGhttp://www.bbronline.com.br/index.php/bbr/oai|| bbronline@bbronline.com.br1808-23861808-2386opendoar:2018-10-31T19:07:01BBR. Brazilian Business Review (English edition. Online) - Fucape Business School (FBS)false |
dc.title.none.fl_str_mv |
Uncertainty and Flexibility in the Brazilian Beef Livestock Sector: the Value of the Confinement Option Incerteza e Flexibilidade na Pecuária de Corte Brasileira: o Valor da Opção de Confinamento |
title |
Uncertainty and Flexibility in the Brazilian Beef Livestock Sector: the Value of the Confinement Option |
spellingShingle |
Uncertainty and Flexibility in the Brazilian Beef Livestock Sector: the Value of the Confinement Option Bastian-Pinto, Carlos de Lamare Real Options Beef Cattle Sector Managerial Flexibility Financial Valuation Opções Reais Pecuária de Corte Flexibilidade Gerencial Avaliação Financeira |
title_short |
Uncertainty and Flexibility in the Brazilian Beef Livestock Sector: the Value of the Confinement Option |
title_full |
Uncertainty and Flexibility in the Brazilian Beef Livestock Sector: the Value of the Confinement Option |
title_fullStr |
Uncertainty and Flexibility in the Brazilian Beef Livestock Sector: the Value of the Confinement Option |
title_full_unstemmed |
Uncertainty and Flexibility in the Brazilian Beef Livestock Sector: the Value of the Confinement Option |
title_sort |
Uncertainty and Flexibility in the Brazilian Beef Livestock Sector: the Value of the Confinement Option |
author |
Bastian-Pinto, Carlos de Lamare |
author_facet |
Bastian-Pinto, Carlos de Lamare Ramos, Alexandre Paula Silva Ozorio, Luiz de Magalhães Brandão, Luiz Eduardo Teixeira |
author_role |
author |
author2 |
Ramos, Alexandre Paula Silva Ozorio, Luiz de Magalhães Brandão, Luiz Eduardo Teixeira |
author2_role |
author author author |
dc.contributor.author.fl_str_mv |
Bastian-Pinto, Carlos de Lamare Ramos, Alexandre Paula Silva Ozorio, Luiz de Magalhães Brandão, Luiz Eduardo Teixeira |
dc.subject.por.fl_str_mv |
Real Options Beef Cattle Sector Managerial Flexibility Financial Valuation Opções Reais Pecuária de Corte Flexibilidade Gerencial Avaliação Financeira |
topic |
Real Options Beef Cattle Sector Managerial Flexibility Financial Valuation Opções Reais Pecuária de Corte Flexibilidade Gerencial Avaliação Financeira |
description |
In this work, the value of existing operational flexibility is evaluated, its emergence being attributable to the Brazilian livestock alternatives for cattle fattening, i.e. by maintenance in pasture or through confinement. This crucial sector of the Brazilian economy, the second largest in the world, is highly fragmented, features low return margins and is subject to significant uncertainty factors. Confinement increases cattle fattening speed and when compared against maintenance in pasture it maximizes return on investment for farmers. In spite of this, confinement decision making is dependent upon appropriate time management. Confinement also poses risks related to the volatility of feed costs. Through the Real Options management methodology, assessment of financial growth in livestock fattening is directly linked to flexibility of timing in the transfer of cattle from pasture to confinement, with the presence of associated uncertainties. The results indicate that there is a significant increase in financial returns through containment, calculated using the return per head system. They also point to the importance of correct confinement timing to maximize returns. |
publishDate |
2015 |
dc.date.none.fl_str_mv |
2015-11-01 |
dc.type.driver.fl_str_mv |
info:eu-repo/semantics/article info:eu-repo/semantics/publishedVersion Peer-reviewed Article Artigo revisado pelos pares |
format |
article |
status_str |
publishedVersion |
dc.identifier.uri.fl_str_mv |
http://www.bbronline.com.br/index.php/bbr/article/view/177 10.15728/bbr.2015.12.6.5 |
url |
http://www.bbronline.com.br/index.php/bbr/article/view/177 |
identifier_str_mv |
10.15728/bbr.2015.12.6.5 |
dc.language.iso.fl_str_mv |
eng por |
language |
eng por |
dc.relation.none.fl_str_mv |
http://www.bbronline.com.br/index.php/bbr/article/view/177/265 http://www.bbronline.com.br/index.php/bbr/article/view/177/266 |
dc.rights.driver.fl_str_mv |
info:eu-repo/semantics/openAccess |
eu_rights_str_mv |
openAccess |
dc.format.none.fl_str_mv |
application/pdf application/pdf |
dc.publisher.none.fl_str_mv |
FUCAPE Business Shool |
publisher.none.fl_str_mv |
FUCAPE Business Shool |
dc.source.none.fl_str_mv |
Brazilian Business Review; Vol. 12 No. 6 (2015): November to December 2015; 100-120 Brazilian Business Review; v. 12 n. 6 (2015): Novembro a Dezembro de 2015; 100-120 1808-2386 1807-734X reponame:BBR. Brazilian Business Review (English edition. Online) instname:Fucape Business School (FBS) instacron:FBS |
instname_str |
Fucape Business School (FBS) |
instacron_str |
FBS |
institution |
FBS |
reponame_str |
BBR. Brazilian Business Review (English edition. Online) |
collection |
BBR. Brazilian Business Review (English edition. Online) |
repository.name.fl_str_mv |
BBR. Brazilian Business Review (English edition. Online) - Fucape Business School (FBS) |
repository.mail.fl_str_mv |
|| bbronline@bbronline.com.br |
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1754732237479215104 |