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Laura's lean beef ?
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<blockquote data-quote="Jogeephus" data-source="post: 525053" data-attributes="member: 4362"><p>I've asked this same question of my neighbor and got one of those "it depends" answers. From what I gather, you are essentially running a small feed lot and are getting paid a fat price. You can lock this price in prior to finish date and get a contract price. As with any commodity, the market price at pick-up date could be more or less than what you contracted the cattle for. Two years ago I know he could have done better selling on the market as the market had gone up. But this cuts both ways. I think the good thing about it is that you know what you will get with a foreward contract like this. You might kick yourself or dance depending on what tomorrow brings. The only really bad thing I've seen is when they didn't pick up the cattle when they were supposed to and he had to continue to feed them for several weeks after the agreed pick up time. This sounded a bit cheesy to me but I don't know if they compensated him for the extra feed and if they penalized him with a slide. Nevertheless, he is still doing it and expanding his operation so he must be content with it.</p></blockquote><p></p>
[QUOTE="Jogeephus, post: 525053, member: 4362"] I've asked this same question of my neighbor and got one of those "it depends" answers. From what I gather, you are essentially running a small feed lot and are getting paid a fat price. You can lock this price in prior to finish date and get a contract price. As with any commodity, the market price at pick-up date could be more or less than what you contracted the cattle for. Two years ago I know he could have done better selling on the market as the market had gone up. But this cuts both ways. I think the good thing about it is that you know what you will get with a foreward contract like this. You might kick yourself or dance depending on what tomorrow brings. The only really bad thing I've seen is when they didn't pick up the cattle when they were supposed to and he had to continue to feed them for several weeks after the agreed pick up time. This sounded a bit cheesy to me but I don't know if they compensated him for the extra feed and if they penalized him with a slide. Nevertheless, he is still doing it and expanding his operation so he must be content with it. [/QUOTE]
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Laura's lean beef ?
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