Today’s beef producer operates in an environment with risks that can send the cattle markets downward in minutes, but other external situations can offer long-term opportunities.
The beef industry’s commodity buying and processing side operates on a global scale. A handful of large international buyers source and sell around the world.
Men and women in today’s cattle business, and agriculture in general, see higher market highs, and lower market lows. And all of that is setting aside the real production risks beef producers face every single day. Weather. Feed costs and availability. Herd health. And marketing.
The challenges and questions in the cattle business are tough, broad and important. It’s high volume and low margin.
Producers have a range of opinions and feelings about price risk and how to deal with it in their operations. But how should the individual producer think about risk management? Let’s try this.
Briefly, risk management starts with producers
1. Understanding where their operations stand today
2. Knowing where they want them to be tomorrow
3. Using the tools available today to get them where they want to be tomorrow
That's what we're all about at Nexus. Your profit, pure and simple.
We feel very fortunate that we’ve got good contracts through Nexus, $300 - $400 dollars better than our local market. That’s $200,000 difference on just 600 head of cattle.” — Paul Riniker
“We like having outside input as to when we should buy and sell, and break-even numbers.”
— Tony Bensman
“We use hedge and straight packer contracts. We like contracting. That way your risk is spread out.”
— Scott Phillips
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