Cattle futures

[gcreekrch]

Dependent on environment. Y'alls major extreme weather is something cattle are designed to survive, ours is something that can kill them with boring regularity.

You mean there is insurance for every animal loss you sustain? Wonder if I paid retroactive the nearly 500 head we have lost to predators in last 20 years would be paid for?

 

[Dave]

It is just a tool. Like every tool there are times to use it and times to leave it in the tool box. There have been years when it would have been handy to have. I think if I am nervous about the market those are the years to use it. I am not nervous this year. It is a way for a smaller operation to use the futures market. You know the big boys do that to their advantage. I have sat in Superiors sale in Winnemucca and watched those buyer on their phones and see the market go up and down during the day as fat cattle and corn futures change.

 

[midTN_Brangusman]

Dave I have been doing LRP’s for a few years now. I always lock in for August in early spring after all the cattle are bought. To me $40 to 50 per steer is cheap insurance in case of a market crash. What I like about lrp is that they settle on the cash market not the futures.

 

[kenny thomas]

Dave I have been doing LRP’s for a few years now. I always lock in for August in early spring after all the cattle are bought. To me $40 to 50 per steer is cheap insurance in case of a market crash. What I like about lrp is that they settle on the cash market not the futures.

Good point about the cash market. If I remember correctly it is the average of maybe 10 of the major markets for the week.

 

[Dave]

Dave I have been doing LRP’s for a few years now. I always lock in for August in early spring after all the cattle are bought. To me $40 to 50 per steer is cheap insurance in case of a market crash. What I like about lrp is that they settle on the cash market not the futures.

I had a crash coarse over the phone. I remembered something about the various cash markets. But didn't remember how that worked well enough to try to explain it.

 

[50/50Farms]

You mean there is insurance for every animal loss you sustain? Wonder if I paid retroactive the nearly 500 head we have lost to predators in last 20 years would be paid for?

There is insurance for loss, but my dumb a$$ didn't read fully what y'all were talking about and we are not talking about the same things.

 

[kenny thomas]

There is insurance for loss, but my dumb a$$ didn't read fully what y'all were talking about and we are not talking about the same things.

But insurance for loss isn't for everything. I have seen it cover lightning but that is about all.

 

[midTN_Brangusman]

I had a crash coarse over the phone. I remembered something about the various cash markets. But didn't remember how that worked well enough to try to explain it.

On the close date it will use the cash feeder index, which for feeder steers is the average price from the top sales across the U.S. instead of closing on the current future market like a future hedge would. That’s why LRP’s are perfect for a backgrounder or cow/calf producer.

 

[midTN_Brangusman]

Good point about the cash market. If I remember correctly it is the average of maybe 10 of the major markets for the week.

That is spot on KT

 

[Otha]

I am more of a keep insurance premiums in my bank account kind of guy. A couple times buying crop insurance and once with price insurance on calves that never paid. $20,000 we will never see again. Much more inclined to spend money on a cheap calf that has 90% chance of surviving and making a profit.

The interesting thing about the LRP is the govt. pays part of the premium. So it puts the odds a little more in your favor vs the regular insurance markets that statistically are against you.

 

[Dusty Britches]

The interesting thing about the LRP is the govt. pays part of the premium. So it puts the odds a little more in your favor vs the regular insurance markets that statistically are against you.

Fixed it For You -

the LRP is WE ALL pay part of the premium -

Once again the government competes against private industry who can't compete against an entity that has unlimited ability to tax, take and redistribute money from producers.

 

[Otha]

Fixed it For You -

the LRP is WE ALL pay part of the premium -

Once again the government competes against private industry who can't compete against an entity that has unlimited ability to tax, take and redistribute money from producers.

Thank you for paying your part of my insurance, I expect the same next year.
It sounds like we both agree the government should stay out of farming but there's not chance in that happening at this point. And as long as all my neighbors and competition is taking tax dollars I will too. I'm not smart enough to compete with a disadvantage.
It seems that our govt. wants Americans to have cheap food and they way that they achieve that is by giving tax dollars to farmers in various ways.