Lawrence, John D.

ISU Extension, No. SP 35 (June 1996)

Market price risk is a part of feeding cattle. This year, in addition to a relatively brief but dramatic fed cattle price collapse, corn prices increased dramatically between the time feeder cattle were purchased and finished cattle were sold. Price fluctuation will continue, but risk management tools exist to help producers lessen the impact of price swings. If used properly, options on futures contracts offer cattle feeders protection from adverse prices with the flexibility to take advantage of better prices should they occur.