RISK MANAGEMENT/MARKETING PLAN 1) Keep it simple
2) Variables to monitor: deferred live cattle futures, corn and cattle feeding margins.
3) Identify the tool 4) Write hard copy of plan 5) Measure and review
6) Become a CattleFax member at
cattlefax.com to assist in steps 1-5.
then look at the October live cattle futures trend, which should include the October live cattle seasonal index. If something changes with the trend, then you know that will impact the value of feeder cattle. Include visuals or graphs of the seasonal price
pattern and the current market in the hard copy of your plan. Write down where you obtained this in- formation — from CattleFax, the local sale barn, or somewhere else. Make a note in your plan about who you will contact if you feel something is changing or not tracking the seasonal index. Keep a hard copy of your plan, graphs, charts and sources nearby for easy reference. The fi nal steps of the plan are implementing, mea-
suring and reviewing. You have your plan written on paper, and you know what you are monitoring. Now put it to use on your cattle inventory. After implementing your plan, measure and review your results. This is the last installment in this series, and I hope
the information is helpful to you in thinking about how you manage price risk and in developing your own risk management plan. If you found value in these articles, have further questions about this information, or just want to have a consistent supply of market analysis, CattleFax welcomes you to become a member and see how we can work with you to improve your bottom line.
Editor’s note: CattleFax provides the daily market report to users of The Cattleman NOW and The Cattleman Plus, our smartphone and tablet apps. The analysts at CattleFax are also providing a monthly column to fur- ther educate members of Texas and Southwestern Cattle Raisers Association (TSCRA). CattleFax offers TSCRA members a special price on CattleFax Select membership — a 2-year membership for $100, a 50 percent savings. Call 800-825-7525 for details.
tscra.org
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I13165
March 2014 The Cattleman 59
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