feeder and fed futures

[Waterlooiowa]

Back 30 some years ago I used to be able to anticipate trends in hog prices by what my regular buyer was paying versus the board and if I was getting calls from buyers from plants that were 50 miles away.Whenever I saw a particular pickup in the neighborhood I automatically bought hog futures because I knew someone was short of hogs,cash would be higher in a day or two and futures would have a 2-4 dollar bounce.That all ended when alot of the smaller packers got bought out,the hog futures started acting like pork belly futures,wild moves on little news..

After watching the cattle and feeder cattle futures from a distance and seeing wild moves I wonder how many cattlemen use the futures or if they just buy puts on a certain percent of production and walk away until market time.

[nwobcw]

I'm just a small feeder producer but I don't play the board at all

[Waterlooiowa]

One of my neighbors feeds out his own calves and buys a few to go with them,he sells thru a sale barn a few at a time and says as long as he stays current he can skip a couple weeks if the market seems weaker than it should be,he hasn't used futures or options since he quit borrowing operating capital

[nwobcw]

that's pretty much my situation

[wrightcattle]

buy calls too. 

no different than on grains. 

then your insured Both ways and own the middle physical product 2.

[Palouser]

..... with some of the subsidized insurance programs. More accurately, it's like having the government put in the majority of the money for the 'puts'. And it's not only price insurance, you can get production insurance at the same time.

In this environment I would be hard 'put' to recommend buying 'puts' as a hedge.