44 NEBRASKA CATTLEMAN April/May 2026 patience alone can often bridge short-term corrections, cattle markets frequently experience multi-year, cyclical pressure. This reinforces that risk management cannot be passive. Sustained profitability requires an active, disciplined strategy for both short-term volatility and longer drawdown risk! THE ROLE OF RISK MANAGEMENT This is not a bearish argument. It is a volatility argument. When beef is historically expensive relative to other proteins, total protein supply is at record levels, consumers are stretched but holding and packers are actively managing margins, the market looks stable. Until it isn’t. Risk management is not about predicting collapse. It is about protecting margins during uncertainty. For producers, that means asking: • What price level locks in profitability? • What downside can my balance sheet absorb? • What would a 10 to 15 percent correction mean to my operation? Tools like futures, options and LRP exist for a reason. They create stability in an otherwise volatile environment. When prices are high, premiums feel expensive. But when prices are correct, protection always looks cheap in hindsight. WHERE WE STAND The current environment can be summarized simply. • Beef demand is strong. • Consumers are still choosing beef. • Packers are managing margins and capacity carefully. • Live cattle prices have not yet experienced a major structural break. History tells us price risk never disappears; it only hides during profitable periods. This is a time for confidence, not complacency. Strong demand supports opportunity. Disciplined risk management protects longevity. Both can exist at the same time. Please reach out to CIH for any further questions at (312) 596-7310 or beef@ cihedging.com. ~NC~ Author’s Note: There is a risk of loss in futures trading. Past performance is not indicative of future results. The information contained in this publication is taken from source believed to be reliable, but is not guaranteed by Commodity & Ingredient Hedging, LLC, nor any other affiliates, subsidiary, or employee, collectively referred to as CIH, as to accuracy or completeness, and is intended for purposes of information and education only. Nothing herein should be considered as a trading recommendation or solicitation of insurance. The rules and regulations of the individual exchanges should be consulted as the authoritative source on all contract specifications and regulations. CIH is an equal opportunity provider and employer. Copyright © 2024 Commodity & Ingredient Hedging, LLC. All rights reserved. MARKETS CONTINUED FROM PAGE 42
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