Iowa State develops new margin app for hog, cattle producers

Livestock producers who purchase feeder cattle or weaned pigs as well as feed and then sell finished animals at a specific point in time take on a significant amount of both input and output price risk. Feeder cattle, weaned pig and feed prices account for a significant share of the total input cost and, along with market livestock prices, are volatile, adding to a producer’s risk. The crush margin, a term borrowed from the soybean processing industry, describes the margin that can be hedged using futures contract prices for soybeans, soybean meal and soybean oil. A crush margin can also be calculated for cattle and hogs and can be used as a risk management tool. Read more…