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Empirical Evaluation Of Selected Hedging Strategies For Cattle Feeders

Author

Listed:
  • Gorman, William D.
  • Schuneman, Thomas R.
  • Catlett, Lowell B.
  • Urquhart, N. Scott
  • Southward, G. Morris

Abstract

Several hedging strategies for fat cattle are compared using actual feedlot performance information for a period of 6.5 years and 747 pens of fat cattle. Results show that cattle feeding was not profitable (a $24.50 per head cash market loss) but a carefully chosen hedging strategy could have reduced the loss by 50 percent.

Suggested Citation

  • Gorman, William D. & Schuneman, Thomas R. & Catlett, Lowell B. & Urquhart, N. Scott & Southward, G. Morris, 1982. "Empirical Evaluation Of Selected Hedging Strategies For Cattle Feeders," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 7(2), pages 1-12, December.
    • Handle: RePEc:ags:wjagec:32276
    DOI: 10.22004/ag.econ.32276
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    References listed on IDEAS

    as
    1. Purcell, Wayne D. & Riffe, Don A., 1980. "The Impact Of Selected Hedging Strategies On The Cash Flow Position Of Cattle Feeders," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 12(1), pages 1-9, July.
    2. Purcell, Wayne D. & Riffe, Don A., 1980. "The Impact of Selected Hedging Strategies on the Cash Flow Position of Cattle Feeders," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 12(1), pages 85-93, July.
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    Citations

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    Cited by:

    1. Leuthold, Raymond M. & Noussinov, Mikhail A., 1999. "Optimal Hedging Strategies For The U.S. Cattle Feeder," Journal of Agribusiness, Agricultural Economics Association of Georgia, vol. 17(1), pages 1-19.
    2. Duncan, Steven Scott, 1988. "The relevant forecast of variance of income for marketing decisions under uncertainty," ISU General Staff Papers 198801010800009839, Iowa State University, Department of Economics.
    3. Ziehm, William Walter, 1986. "An evaluation of alternative hedging strategies for Iowa cattle feeders: before, at, and after placement, 1974-1984," ISU General Staff Papers 1986010108000018118, Iowa State University, Department of Economics.
    4. Karali, Berna & McNew, Kevin & Thurman, Walter N., 2018. "Price Discovery and the Basis Effects of Failures to Converge in Soft RedWinter Wheat Futures Markets," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 43(1), January.
    5. Frank, Stuart D. & Pfeiffer, George H. & Curtis, Charles E. & Irwin, Scott H., 1986. "Analysis Of Soybean Options Harimting Strategies," 1986 Annual Meeting, July 27-30, Reno, Nevada 278501, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    6. Tonsor, Glynn T. & Dhuyvetter, Kevin C. & Mintert, James R., 2004. "Improving Cattle Basis Forecasting," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 29(2), pages 1-14, August.
    7. Pluhar, Darwin M. & Shafer, Carl E. & Sporleder, Thomas L., 1985. "Helmuth's Trading Technique: Further Evidence and Implications for Cattle Hedging Strategies 1975-1982," Staff Paper Series 257976, Texas A&M University, Department of Agricultural Economics.
    8. Mikhail A. Noussinov & Raymond M. Leuthold, 1998. "Optimal Hedging Strategies for the U.S. Cattle Feeder," Finance 9804004, University Library of Munich, Germany.
    9. Ted C. Schroeder & Orlen C. Grunewald & Scott A. Langemeier & Del M. Allen, 1989. "An analysis of live cattle option hedging strategies," Agribusiness, John Wiley & Sons, Ltd., vol. 5(2), pages 153-168.
    10. Al-Samarrae, Sana Saleh, 1985. "An evaluation of placement hedging in developing alternative marketing strategies for Iowa cattle feeders, 1974-1984," ISU General Staff Papers 1985010108000017546, Iowa State University, Department of Economics.

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    Keywords

    Livestock Production/Industries; Marketing;

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