A Prehedging Strategy For The Feedlot Operation

During recent years, the feeder cattle industry has experienced financial instability. This paper provides a possible marketing strategy that may help reduce this financial instability by providing a Prehedging Strategy for the feedlot operator. The Prehedging Strategy establishes a dynamic hedge on...

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Bibliographic Details
Published in:Western Journal of Agricultural Economics 1981-07, Vol.6 (1), p.31-41
Main Authors: Spahr, Ronald W., Sawaya, William J.
Format: Article
Language:English
Subjects:
Cash
Cattle
Corn
Corn prices
Feeder cattle
Feedlots
Futures contracts
Futures markets
Slaughter
Standard deviation
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Summary:During recent years, the feeder cattle industry has experienced financial instability. This paper provides a possible marketing strategy that may help reduce this financial instability by providing a Prehedging Strategy for the feedlot operator. The Prehedging Strategy establishes a dynamic hedge on the major factors of production of the feed lot operator and is shown to provide higher average returns and lower financial risk.
ISSN:0162-1912
1068-5502
2327-8285