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Using Futures Markets to Manage Price Risk for Feeder Cattle: Advanced Strategies

Summary

Price volatility in feeder cattle markets has greatly increased over the last several years. While there are many reasons for the increase in price volatility, some of the more common factors include volatility in grain and fed cattle prices, variability in weather, and an increased dependence on exports. Price risk is becoming another factor that cattle producers must learn to manage, just like they would manage anything else on their operation. This volatility is also most likely behind a recent increase in producer interest in learning more about strategies to manage price risk for feeder cattle.