The purpose of this report is to evaluate the pricing performance of market advisory services’ live cattle hedging recommendations over 1995-2004. Also, feeder cattle, corn, and soybean meal recommendations were evaluated as input hedges and combined with the live cattle marketing recommendations to approximate the margin that a typical feedlot would face from the third quarter of 1999 through 2004. Other marketing assumptions were also applied to approximate a real world feedlot in Western Kansas. Several key assumptions are 1) the feedlot markets on average 1 cwt. of live cattle per quarter, inputs are purchased at rates that will yield on average 1 cwt. of live cattle per quarter, or 4 cwt. total per year, 2) the marketing widow for live cattle marketings begins six months prior to the start of the marketing quarter, making the total marketing window nine months long, 3) brokerage costs are subtracted from futures and options markets gains or losses and 4) the quarterly purchases of inputs, live cattle marketings and benchmark prices are weighted by quarter to reflect the cyclical nature of live cattle marketing.


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