{"id":60,"date":"2017-05-26T14:14:26","date_gmt":"2017-05-26T18:14:26","guid":{"rendered":"http:\/\/site.extension.uga.edu\/aaecext\/?p=60"},"modified":"2017-05-26T14:31:17","modified_gmt":"2017-05-26T18:31:17","slug":"now-is-a-good-time-profits-spring-calves","status":"publish","type":"post","link":"https:\/\/site.extension.uga.edu\/aaecext\/2017\/05\/now-is-a-good-time-profits-spring-calves\/","title":{"rendered":"Now is a Good Time to Lock in Profits for Spring Calves"},"content":{"rendered":"<p>by <a href=\"https:\/\/www.caes.uga.edu\/departments\/ag-econ\/people\/faculty\/levi-russell.html\">Levi Russell<\/a><\/p>\n<p>The recent run-up in wholesale beef prices has sent cash and futures prices through the roof in the past few weeks. This provides an opportunity for producers with spring-calving herds to lock in a profit. For instance, right now producers can buy a put option on the September feeder contract at a strike price of $135\/CWT for $1,375. This is relatively cheap &#8220;insurance&#8221; since we&#8217;re likely to see calf prices fall again in the near future as wholesale beef drops back down or feedlot margins are squeezed.<\/p>\n<p>Today&#8217;s cattle on feed report is a good example of bad news at the feedlot level affecting marketing prospects. So far today we&#8217;ve seen a significant drop in feeder futures due to the slow pace of marketing relative to placements in April. Now is a good time to lock in profit as we&#8217;ll probably continue to see some downward pressure on feeder prices in coming months.<\/p>\n<p>For more information on hedging and options, check out the following publications.<\/p>\n<p><a href=\"https:\/\/extension.uga.edu\/publications\/detail.cfm?number=B1406\">Understanding and Using Cattle Basis in Managing Price Risk<\/a><br \/>\n<a href=\"https:\/\/extension.uga.edu\/publications\/detail.cfm?number=B1404\">Using Futures Markets to Manage Price Risk in Feeder Cattle Operations<\/a><br \/>\n<a href=\"https:\/\/extension.uga.edu\/publications\/detail.cfm?number=B1405\">Commodity Options as Price Insurance for Cattlemen<\/a><\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-62 size-full aligncenter\" src=\"https:\/\/site.extension.uga.edu\/aaecext\/files\/2017\/05\/Picture1-1.png\" alt=\"\" width=\"1008\" height=\"881\" srcset=\"https:\/\/site.extension.uga.edu\/aaecext\/files\/2017\/05\/Picture1-1.png 1008w, https:\/\/site.extension.uga.edu\/aaecext\/files\/2017\/05\/Picture1-1-300x262.png 300w, https:\/\/site.extension.uga.edu\/aaecext\/files\/2017\/05\/Picture1-1-768x671.png 768w, https:\/\/site.extension.uga.edu\/aaecext\/files\/2017\/05\/Picture1-1-158x138.png 158w\" sizes=\"auto, (max-width: 1008px) 100vw, 1008px\" \/><\/p>\n","protected":false},"excerpt":{"rendered":"<p>by Levi Russell The recent run-up in wholesale beef prices has sent cash and futures prices through the roof in the past few weeks. This provides an opportunity for producers with spring-calving herds to lock in a profit. For instance, right now producers can buy a put option on the September feeder contract at a [&hellip;]<\/p>\n","protected":false},"author":217,"featured_media":62,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3,19],"tags":[23,24,26,25],"class_list":["post-60","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-beef-cattle","category-marketing","tag-beef-cattle","tag-futures","tag-marketing","tag-options"],"_links":{"self":[{"href":"https:\/\/site.extension.uga.edu\/aaecext\/wp-json\/wp\/v2\/posts\/60","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/site.extension.uga.edu\/aaecext\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/site.extension.uga.edu\/aaecext\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/site.extension.uga.edu\/aaecext\/wp-json\/wp\/v2\/users\/217"}],"replies":[{"embeddable":true,"href":"https:\/\/site.extension.uga.edu\/aaecext\/wp-json\/wp\/v2\/comments?post=60"}],"version-history":[{"count":10,"href":"https:\/\/site.extension.uga.edu\/aaecext\/wp-json\/wp\/v2\/posts\/60\/revisions"}],"predecessor-version":[{"id":72,"href":"https:\/\/site.extension.uga.edu\/aaecext\/wp-json\/wp\/v2\/posts\/60\/revisions\/72"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/site.extension.uga.edu\/aaecext\/wp-json\/wp\/v2\/media\/62"}],"wp:attachment":[{"href":"https:\/\/site.extension.uga.edu\/aaecext\/wp-json\/wp\/v2\/media?parent=60"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/site.extension.uga.edu\/aaecext\/wp-json\/wp\/v2\/categories?post=60"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/site.extension.uga.edu\/aaecext\/wp-json\/wp\/v2\/tags?post=60"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}