AgEcon Search

AgEcon Search >
       Journal of Agricultural and Resource Economics >
          Volume 17, Number 01, July 1992 >

Please use this identifier to cite or link to this item: http://purl.umn.edu/30729

Title: CASH FORWARD CONTRACTING VERSUS HEDGING OF FED CATTLE, AND THE IMPACT OF CASH CONTRACTING ON CASH PRICES
Authors: Elam, Emmett W.
Issue Date: 1992-07
Abstract: This research examines cash forward contracting of fed cattle. For an individual feeder, a cash contract eliminates basis risk (as compared to a futures hedge). However, the disadvantage is that the contract price is estimated to be lower than the futures hedge price by $.28 - $.59/ cwt for steers and $.86 - $1.64.cwt for heifers. From the industry perspective, contracting appears to have a negative impact on cash prices. An increase of 1,000 head in U.S. monthly contract cattle shipments is associated with a $.003—$.009/cwt decrease in the U.S. average cash price. The negative impact of cash contracting varies by state.
URI: http://purl.umn.edu/30729
Institution/Association: Journal of Agricultural and Resource Economics>Volume 17, Number 01, July 1992
Total Pages: 13
Language: English
From Page: 205
To Page: 217
Collections:Volume 17, Number 01, July 1992

Files in This Item:

File SizeFormat
17010205.pdf1137KbPDFView/Open
Recommend this item

All items in AgEcon Search are protected by copyright.

 

 

Brought to you by the University of Minnesota Department of Applied Economics and the University of Minnesota Libraries with cooperation from the Agricultural and Applied Economics Association.

All papers are in Acrobat (.pdf) format. Get Adobe Reader

Contact Us

Powered by: