Agricultural Economics Department
Date of this Version
12-20-2017
Citation
Cornhusker Economics, December 20, 2017, agecon.unl.edu/cornhuskereconomics
Abstract
Price and market uncertainties pose a significant risk to cattle producers with a substantial amount of money invested in breeding livestock, land, and other infrastructure. Price protection through the Chicago Mercantile Exchange (CME) futures contracts and options can be used to help mitigate this risk but, in the case of futures contracts, they can also introduce financial burdens in the form of margin calls. Furthermore, many medium to small-scale producers prefer not to get involved with trading futures and options contracts.
Comments
Copyright 2017 University of Nebraska.