Hedging

[$short]

Is anyone selling nov 12 feeder cattle or buying
puts to protect next years calf crop price?

Help me out here.......

A contract is 50,000 lbs right? If you figure say
500 lb calves for easy figuring and a 100 head
each contract basically locks in that much
production right? If that's correct you can lock in a
floor price of $149/cwt?

It seems like a fairly decent bottom price to me or
am I missing something?

[rkaiser]

Do you own cattle $short?

Might offer some thoughts if you do.

If you are one of the many that now have the opportunity to play with producers livelihoods to try and make a buck. Well -- I will hold back on telling you where to go for assistance.

[ag-boy]

yes there has never been a better time for hedging ! U S boys doing it a lot more than we Canadian,
first of all find a good broker or large cattle plant ,because your dollar locking in for that time of selling and taking your beef is inportant to lock in a profit
we have done a lot of it and put you in a profit or not , a choice you have to by that fdr or if you are raising them.
ther is no secret to hold back on as rkaiser is mention .
We all know the market will be high next april to may take your pick and watch Chicago live cattle
Wish you all the best of luck ,

[$short]

Rk, yes I do own cattle

[errolanderson]

We handle hedging for a number of
feeding operations across the prairies.
Right now, we are purchasing Apr, Aug
and Oct feeder cattle put option bear
spreads as protection. These bear
spreads protect $6 to $10/cwt of market
downside depending on spread.

Going straight short the feeder cattle
futures has been painful and triggered
many margin calls.

Don't know when this market will peak,
but my fear is that a sharp stock market
correction may start the process.

Errol