LIVESTOCK OVERVIEW

Commodity futures on livestock, dairy and forest products enable numerous companies, ranging from small family farms to large agribusinesses, to better manage their price risks. Trading commodity futures can also be rewarding for those who accept the risk these agribusinesses seek to diminish. Now, both hedgers and traders have a choice of contracts — electronic or pit-traded.

Cattle: The Cattle industry is truly the last bastion of small independent producers left in United States agribusiness. Approximately 67 percent of the Cattle produced in the United States are small to mid size, single, family-owned Cattle operations with less than 500 head. According to a survey done in 1996, almost half of the Cattle businesses in operation have been in the same family for over 50 years. more»

Feeder Cattle: Feeder cattle are young animals sent to feedlots for finishing into "fed" cattle, the basis of CME’s® Live Cattle contracts. CME® added Feeder Cattle futures to its list of livestock products in 1971, and in 1987 the Exchange added options on futures on this contract. These tools have enabled cattle producers to manage their price risk more effectively. through the years, the contract has continually evolved to more effectively serve both long and short hedgers. more»

Lean Hogs: Hog production in the United States has undergone a dramatic change in the last decade and a half.  In 1988, Hog farms with less than 1,000 head accounted for 32% of the market share of all Hog producers, while large 50,000 plus head operations accounted for roughly 7% of total hog production.  According to a 1998 pork industry Structure Study done by the University of Missouri, large 50,000 plus animal operations now account for 37% of the total Pork Industry, while small 1,000 head or less operations only account for 5% of total US market share.  This transformation from small operators to large-scale operations has changed the nature of the pork industry as well as pork futures trading.More»

Pork Bellies: Pork Bellies, or the cured carcass of a slaughtered pig, usually account for roughly 13.5 percent of the carcass weight of the hog.  The belly is removed from the carcass and cured in a heavy salty brine solution and put in cold storage to eventually be sliced into bacon.  Bacon, the end result of the pork belly, is unique among meat products in that it has no substitutes.  The major factor effecting Pork Belly prices is the number of hogs being slaughtered and the demand for bacon. more»

To learn more, contact our professional consultants today: 1- 800-974-8744

 

 

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