If, for generations, your family's cattle business has been marketing calves the same way, the same day each and every year, now might be the time to reconsider your market strategies to minimize risk and capture higher prices in today's highly volatile marketing situation. This was the advice given by Heather Gessner, McCook County Extension educator and marketing, farm management specialist, at a cattle marketing and risk management session that I attended last week in Worthing, S.D. at the Sioux Falls Regional Livestock Auction Barn. Gessner offered up tips and tricks for producers to consider, and although it might be basics for some, she encourages producers to reanalyze their plans annually. Now might be the time to do just that.
Throughout the session, Gessner discussed basic futures and options for producers to consider such as contract specifications, hedging livestock, futures prices, cattle basis, selling futures, options prices and buying put options. She referred to these marketing tools as "paper farming," a term for purchasing puts and calls to minimize risk and take advantage of profitable opportunities. I had the opportunity to interview Gessner following her presentation. You can listen to our chat below. For more information on cattle marketing tools and strategies, link here.
BEEF Daily Quick Fact: "Figure out which tools you're comfortable with and start from there to develop your cattle marketing plan. Take the mystery out of cattle marketing and make educated decisions." -Gessner's advice to beef producers.
Be sure to stop back each day this week. I will be covering hot topics on agriculture advocacy through social media, cost saving ideas for the ranch and my recent trip to Ohio to work with beef industry youth. Stay tuned!