Agricultural Economics Department
Date of this Version
5-15-2023
Document Type
Article
Citation
Parsons, J. “Managing Calf Market Risk with LRP in 2023.” CAP Series 23-0503, Center for Agricultural Profitability, University of Nebraska-Lincoln, May 17, 2023. DOI: 10.32873/unl.dc.cap003.
Abstract
When profit margins are strong, livestock owners have a natural tendency to relax a bit and enjoy the business of producing animals. Expansion may come to mind and effort is often put forth to improve production output. Protecting market price may become a secondary priority. However, a lot can happen between now and marketing time. Price trends can suddenly turn and quite often expectations may not be met. Protecting price should be just as much — maybe more — of a priority when the price outlook is optimistic, as it is in a downward trend. An unprotected, overly optimistic price forecast can hurt your bottom line just as easily as a downward trend that suddenly gets worse.