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Senior Contributor

Why Aren't You Trading Chicken Futures?

Trading in chicken futures doesn't seem to be a succesful marketing strategy.  Tried and didn't work.  Is this the future of hogs and cattle?

Vertically integrated markets dominated by contracts.

A few large producers.

Small producers exit the market on every downturn.

Buyers with a captive supply can sell into and thus cap the market.

Chickens are a fast turnaround, more so than hogs and much more so than cattle.  That reduces the volatility associated with time, at least to some extent.

Will corn be this way in 10 years?

 

I say it will be leaning in this direction, faster than you think.  Don't agree?  Maybe for commodity grains, but for an increasing amount of specialty grains it's likely there will never develop a good price discovery mechanism, and it is in the interest of buyers to get as much specializaiton in the product as they can get.  That also means more individualized contracts so they can't be compared easily, and it means more non-disclosure contracts.

 

Anybody want to go long Leghorns?

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Honored Advisor

Re: Why Aren't You Trading Chicken Futures?

Been just one cluck away  twice from trading Rhode Island Reds...

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