Risk has always been an important dimension of the agricultural sector, and considerable effort has been expended to incorporate risk dimensions in decision models for the farm firm. With the dramatic fluctuations in commodity prices of the 1970's, the Midwest farmer has been confronted with increasing risk, particularly if cattle feeding has been a part of his farm organization. Fluctuations in feed costs, feeder cattle and fed cattle prices have resulted in wide variations in profit per head. In addition, new technology in feeding systems and housing is available and feeders must decide if that technology is feasible and if it should be adopted.