western iowa,by Denison | roo - 5/23/2026 07:00
It’s why LRP insurance makes way more sense. No margins calls. Plus you can’t jump in and out, which usually happens at the wrong time. You can insure any number of head so your not locked into contract size loads.
I lifted my hedges as I sold the cattle on a Packer contract-at the time I was hedging off the board buying lrp was over $130 a head-it was 20 fat cattle contracts
800,000lbs as a cme live cattle is 40.000#
typically, my cattle average 1500# or 26 head per contracts
just like lrp,i can not get out of the packer contract and will be set to sell those cattle in a 30 day window-we have that time frame to set the price as my basis is locked in on day 1
I have more then 800 head insured with a lrp that cost $20 a head-they are insured at $2 fat as I do not know what the market will be,of those 800 head for dec I have been selling some on a packer contract also
Having no margin calls wither its lrp or puts is the same thing except you do not pay for your puts until you sell the fats in that marketing window which my agent told me its 60 days-probably better to lrp off the feeder board then the fat cattle lrp
owning out rite puts instead of lrp lets you make a educated move to manage them,roll them ahead or sell them back-when they started getting subsidized it has almost forced you to leave them alone and better off going to a straight hedge
As a insurance agent Roo what is your typical commission? I would think 10% of the cost would probably be to cheap |
Garvo’s $2.28 hedges?
