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Historical Materials from University of Nebraska-Lincoln Extension

Farm management

1984

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G84-726 Delivering Slaughter Steerse On A Live Cattle Futures Contract, Allen C. Wellman Jan 1984

G84-726 Delivering Slaughter Steerse On A Live Cattle Futures Contract, Allen C. Wellman

Historical Materials from University of Nebraska-Lincoln Extension

This NebGuide discusses how to estimate when it might be profitable to deliver on a live cattle futures contract and outlines delivery costs and procedures.

Although most hedgers do not actually make delivery on a live cattle futures contract, the threat of delivery is an important feature of the futures market. A producer who hedges using the futures market normally offsets the futures position by buying back a futures contract and selling the slaughter cattle on the cash market.

However, there are times when it is advantageous to actually deliver on the contract. Actual delivery should be made only when ...