Risk Management Class

News Release: For Immediate Release

Date: Nov. 16, 2001 Contacts: Ron Torell, Northeast Area Livestock Specialist, University of Nevada Cooperative Extension, (775) 738-1721, [email protected] Photos: Color photos are available in prints or digital files. Contact Alice Good, Communications Coordinator, University of Nevada Cooperative Extension, (775) 784-7070, [email protected] Free Cooperative Extension Futures course takes the risk out of selling “fat” cattle

RENO—Western producers who consigned 90 head of cattle to the University of Nevada and Idaho Cooperative Extensions’ “Inside Beef” retained ownership and risk management course increased the per-head income on their cattle by an average of $43. Some of the 80 ranchers realized as much as $188 per head.

“Hedging with futures contracts is a great marketing tool that, when mastered, help ranchers stay in business,” says Ron Torell, Northeast Area Livestock Specialist with University of Nevada Cooperative Extension. “It’s a learn-by-doing approach that protects producers from downside risks in market prices.”

In fall 2000, the 600-pound, pre-conditioned and weaned calves from Nevada, Idaho, California and Oregon were shipped to feedlots in Idaho. The cattle were fed against the April and June 2001 live cattle fat contract months, and marketed on a rail grid basis. Ranchers attended monthly meetings in local communities on how to determine breakeven costs, the basics of futures and options, the USDA grading system, selling cattle on the grid and beef quality assurance practices.

Before slaughter in April 2001, the average daily gain of the cattle on feed was 3.48 pounds, and their average final weight was 1,190 pounds. Torell said the major indicators that contributed to the ranchers’ profits were the genetics and quality grades shown in the carcass data; the ranch health and management programs; and, of course, the risk management strategies. “I am very pleased with my profits and it’s nice to get a check this time of year,” said Charlie Hone, whose Gardnerville ranch specializes in Angus and Gelbvieh cattle. “I recommend this program to everyone – it helps with every facet of the business.”

Ranchers may join the 2001 program by contacting Torell, at (775) 738- 1721, or [email protected] “Inside Beef” is sponsored by the USDA Risk Management Agency.