A YEAR ago, the feedlot sector was under severe stress, but there may have also been opportunities worthy to explore for hedging a year ahead for early 2009. The drought demonstrated the extreme level of price volatility that participants within the agricultural sector must manage. The lotfeeding sector is not immune to this risk, rather the opposite due to the margin focused nature of the industry. Chart 1 shows the price history over the past 12 months for the Eastern Young Cattle Indicator (EYCI)and MLA/SFE Cattle Futures contracts available for trading during the same period of time. Although not represented in this chart, there were opportunities in October 2007 to lock in grain prices not far off present day values.
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