Beef Buzz News
Cattle Marketing Decisions Made Easier Thanks to BeefBasis.com
Wed, 15 Jun 2016 22:30:20 CDT
Whether you're buying or selling stocker cattle, www.beefbasis.com is a valuable tool to help calculate the potential return on your animals. Kansas State University Extension Livestock Market Economist Dr. Glynn Tonsor says it's a good resource to pull feeder cattle futures market information into management decisions.
Tonsor uses an example of a 550 lb. steer sold on Sept. 14 in Salina, Kan. is projected to bring $156/cwt.
"That is basically reflecting the September feeder cattle contract was trading $144/cwt and beefbasis.com was projecting a basis of positive 12 bucks," he says. "So the math is basis plus futures gives you the cash price."
Stocker operators can use beefbasis.com to make purchasing decisions. Using the same example, Tonsor now looks at putting 200 lbs. on the steer and selling him in mid-March or waiting to buy the steer in October, putting on the 200 lbs. and selling him in April.
He says in the first scenario, the value of gain is projected to be $54/cwt based on the futures market, but in the second scenario, value of gain is projected to be $72/cwt.
"Those are both projections on what you pay in October and what you get in April, but I'm trying to give some credence to the fact that if you're a stocker operator, there's some clear signals to wait," Tonsor says. "It also kind of tells me there may be some incentives in the market to pull down those September prices relative to October and November as we get closer to that because the September ones are at a premium."
Listen to Tonsor talk more about the www.beefbasis.com resource during the latest Beef Buzz.
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