Compare cash price to futures for fed cattle basisBROOKINGS, S.D. — Early in the year, a common marketing practice among cattle producers is to take a look at livestock basis levels, explains Matthew Diersen, South Dakota State University Extension risk and business management specialist. “You never know when subtle changes can derail price expectations. The focus here is on fed cattle basis, which has a strong seasonal pattern. The most common way to look at fed cattle basis is to compare a monthly cash price for a given market to the nearby futures price. Basis equals the cash price minus the futures price,” Diersen says.
By: SDSU Extension Service,