Date of this Version
A producer who hedges with a live cattle futures contract normally will offset the futures position by buying a futures contract and selling the cattle on the cash market. However, there may be a time when it is advantageous to make delivery of the cattle against the contract. In fact, the potential or alternative for delivery is an important necessary contract feature.
Live cattle futures follow a Certificate of Delivery procedure, the details are covered later in this Fact Sheet. Mid-America Exchange delivery units equal one-half the size and have the same delivery conditions as the Chicago Mercantile Exchange (CME) delivery unit.