Conferences
MANAGING PRICE RISK FOR PURCHASED FEED BY LIVESTOCK PRODUCERS AND FEED SUPPLIERS
Emmit L. Rawls
Summary
Livestock producers and those who manufacture feed are subject to significant price risk due the volatility in the cost of feeds and feed ingredients. In order to manage that price risk, materials were developed which illustrated the extent of price variability for various feed ingredients. In addition correlation tables were developed which indicated how closely the prices for feed ingredients tracked prices for some basic feeds such as corn, soybeans and soybean meal which are traded on the commodity futures and options markets. Basic instruction modules were developed to teach hedging with futures, use of options, seasonality of prices for various feeds and feed ingredients and use of technical analysis to improve the timing of pricing decisions. This information was presented to livestock producers and feed manufacturers at 10 workshops in Georgia and Tennessee. The workshops were attended by 145 producers and agribusiness persons. As a result of the workshops there was a 79 percent increase in the level of knowledge in using the futures market, 85 percent increase in level of knowledge in using the options market and 72 percent increase in level of knowledge in the seasonal tendencies of feed grains and by-product feeds. There was also a 93 percent increase in the level of knowledge in the use of charts to improve timing of pricing/marketing decisions.
Details
| Conference | 2009 National Extension Risk Management Education Conference |
| Presentation Type | Poster |