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Price risk management paramount for cattle producers

A livestock economist says now is a good time for cattle producers to explore risk management options. Josh Maples with Mississippi State University says, “I think it’ll help you sleep better.”

He producers saw wide swings in some futures prices last week. “That May feeder cattle contract was trading near $265 at one point on Tuesday, and then by Friday, it was trading up near $279,” he says. “That’s a $14.00 swing in four days.”

Maples tells Brownfield risk management is necessary even when prices are higher. “If you’re caught selling at a time when you’re at the wrong end of a swing, then then you’re leaving money on the table,” he says. 

Maples says the back-and-forth announcements on tariffs are contributing to market volatility and wide price swings. “It’s not just tariffs on cattle or beef or products like that,” he says.  “It’s also tariffs on all the other things that then tie into our cattle and hog markets as well.”

He says producers can insulate their operations by using price risk management tools like futures, options, or Livestock Risk Protection.