July 7, 2000

MARKETING

By Bryce Myrick
Director, TFB Agricultural Marketing Education

As I have traveled around the state conducting marketing workshops, many cattle producers tell me the reason they do not hedge their feeder cattle on the Chicago Mercantile Board is because of the size of the contract. Currently, a contract is 50,000 lbs. When you use this for 700 to 800 lb. cattle, that equates out to 60 to 70 head. Many of our producers do not have that many head that they need to market at one time.

Now, producers may have a better opportunity to hedge feeders using the Board. The Mercantile has announced that this fall they plan to start trading 10,000 lb. feeder contracts. This will allow producers to better manage their risk by selling contracts on 13 to 14 head, instead of 60-70. Producers with 25 to 50 head could also stair-step prices on two to four contracts to implement their marketing plan.

To learn more about these new contracts or for any help with your commodity marketing, give us a call.

To set up workshops or for help with your hedging needs, call 254-751-2242 or 915-698-0355 or e-mail: bbmyrick@swconnect.com.