Stronger Yearling Prices, Brings More RiskTue, 03 Jun 2014 15:32:32 CDT
When it comes to the cattle business, the stocker segment in particular has a favorable outlook for summer 2014. Livestock Marketing Information Center Director Jim Robb says that especially true, if cattlemen already own the cattle.
"I think certainly for the people that have already bought the calves these programs can fair surprising good this year," Robb said. "Record high calf prices, but the heavy weight yearling market has really been the market that has charged ahead of the other markets as we look across the board."
"I think that raises a bit of risk in this marketplace," Robb said. "We have had the premium of the 700 -800 pound and sometimes heavier steer widen relative to the calf, which makes those trying to buy the animals these programs look less profitable than they did a few weeks ago, but also widen relative to the fed cattle market."
With a strong heavy weight yearling market, Robb says a a little bit of risk management options could be prudent.
"We have future market options, we also have the government-sponsored livestock risk protection programs through the federal crop insurance agents," Robb said.
"We've had a runaway heavy weight yearling market, even trying to price those animals a little bit early on the video auctions, etc.," Robb said. "We certainly have had a very strong run and one that some prudent risk management maybe be money well spent."
Robb's comments were complimentary of Eric Atkinson of Agricultural Today with Kansas State University Research and Extension News.
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