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Mid Summer 2023 Prices
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<blockquote data-quote="bird dog" data-source="post: 1773936" data-attributes="member: 5381"><p>What you are doing is buying a put on cattle prices where you have the right to sell them at a certain price. To participate in the USDA program you have to have the animals to back it up. This is not for gambling or investing. Its risk protection. </p><p></p><p>Its a good program where the USDA pays some of the premium and swings the advantage to more in our favor. Its like playing a casino game where you are the house and have a slight favor. Its similar to forage insurance where you should win more times than you lose. You don't pay anything until the contract ends. If it ends in your favor, they mail you a check for the difference between the price at closing versus the price you contracted for. If it closes not in your favor, you pay the agreed upon premium price, no more or no less. </p><p></p><p>You can buy coverage on one calf or 1000 even if they are unborn. The gal that handles mine is suggesting the coverage for half of your spring calves that expires in mid October. A steer and heifer contract for for $2.12/lb selling price based on 599 lbs ( I think). Your cost if it doesn't go your way is about $40 per head. Keep in mind all this changes daily. You can set it up for a lesser closing price for less premium. You can do steers, heifers or a combination. There are many contract options.</p></blockquote><p></p>
[QUOTE="bird dog, post: 1773936, member: 5381"] What you are doing is buying a put on cattle prices where you have the right to sell them at a certain price. To participate in the USDA program you have to have the animals to back it up. This is not for gambling or investing. Its risk protection. Its a good program where the USDA pays some of the premium and swings the advantage to more in our favor. Its like playing a casino game where you are the house and have a slight favor. Its similar to forage insurance where you should win more times than you lose. You don't pay anything until the contract ends. If it ends in your favor, they mail you a check for the difference between the price at closing versus the price you contracted for. If it closes not in your favor, you pay the agreed upon premium price, no more or no less. You can buy coverage on one calf or 1000 even if they are unborn. The gal that handles mine is suggesting the coverage for half of your spring calves that expires in mid October. A steer and heifer contract for for $2.12/lb selling price based on 599 lbs ( I think). Your cost if it doesn't go your way is about $40 per head. Keep in mind all this changes daily. You can set it up for a lesser closing price for less premium. You can do steers, heifers or a combination. There are many contract options. [/QUOTE]
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