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Iowa | I have no idea of what you just said.
I have been a "player" for 33 years, larger in hogs but also a few calves each year.
I live off the margin--when I can buy an input (feeder cattle) and lock in a profitable output (fat cattle) I do it. I may even buy if I can lock in breakeven and then hopefully roll up.
No margin=empty lot.
The older I get, the less risk I'll take. Part of it is age, and part of it is I now have assets I could lose.
Remember the hog market right before SWINE FLU? EVERYONE, my banker, my marketing advisor, etc, said, "stay open, this thing's going to $100/cwt."
I chickened out on half of my production and bought options. Then along comes THE PERCEPTION of swine flu, billions lost over consumer perception almost overnight. I sold those $2200 options for something like $8000, I can't exactly remember. Too bad only half of my production, but I got through it pretty much unscathed. My banker told me he had a guy that had to borrow $3000/a against a paid-for 80A to get through it. I said never again I'm gonna be open.
No margin= empty lots for me.
Glad someone else can do it and sleep at night--I can't. The tiny bit I've accumulated has come far too hard...... | |
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Cattle feeders have GUTS to fill lots this fall
