![]() ![]() The contract provides the option for carcass delivery at a slaughter plant or live-graded delivery at an approved stockyard. Par delivery for Live Cattle futures is 70% Choice, 30% Select, Yield Grade 3. Live Cattle futures is a physically delivered contract delivery units shall have an estimated average hot yield of 63%. One Live Cattle futures contract represents 40,000 pounds of live steers or heifers, each between 1,050 and 1,600 pounds depending on sex. Cattle price risk at this point in the supply chain can be managed using CME Group Live Cattle futures. Once they have reached slaughter weight, the cattle are then sold to meat packers. The 'feeder cattle' contract represents 50,000 pounds of steers weighing 700. Cattle will typically remain at the feedlot for three to six months. There are two types of cattle traded on the futures market, 'live cattle' and 'feeder cattle.' The 'live cattle' contract is a 40,000-pound contract representing cattle ready to be harvested and that will grade 55 percent Choice, 45 percent Select, and yield grade 3. Feedlots provide a diet that can include corn, soybean meal, hay, grass, and wheat, as well as additives to optimize growth. Rate of gain will differ by operation and animal due to various factors, but generally 6lbs of dry matter can translate to 1lb of gain. Once at the feedlot, animals are fed with a target weight gain of 2.5-4lbs per day. A daily index is calculated from USDA-reported auctions of such animals, on which the futures contract is financially settled at expiration. Cattle identified as predominantly dairy, exotic, or Brahma breeding are excluded. Cattle must be of Medium and Large Frame #1 and Medium and Large Frame #1-2. ![]() One Feeder Cattle futures contract represents 50,000 pounds of steers between 700 and 899 pounds sold at auction in the 12-state region of Colorado, Iowa, Kansas, Missouri, Montana, Nebraska, New Mexico, North Dakota, Oklahoma, South Dakota, Texas, and Wyoming. The CME Group Feeder Cattle futures contract represents this stage in the cattle lifecycle. Once calves are weaned, unless the animals are chosen to stay in the operation to breed, they will enter the feeding system through various paths such as a stocker or backgrounding operation and will eventually be sold as “feeder cattle.” Breeding cows and their calves, on the whole, are maintained year round in pastures with little to no grain input. Cattle gestation takes approximately 280 days and cows can give birth once per year. Grazing land covers 27% of the United States by area, or 614 million acres as of 2022.Ĭow-calf operations, particularly in the Western United States, are frequently situated on land not suitable for crop production. Cow-calf operations in the United States average 44 head nationally, with 90% of the operations family-owned. Beef-cattle life in the United States generally begins on a cow-calf operation. ![]()
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