Abstract
Current prices for agricultural commodities are strong. The average auction market price in early May for 500–600-pound steer calves in Nebraska was $264 per cwt. Heifer prices were $30 lower, at $234 per cwt. Elevator prices for corn in western Nebraska are in the high $6-per-bushel range. Wheat prices at the elevator are around $8 per bushel. Hay prices are $200 to $300 per ton if you can find it. Severe drought and world market volatilities over the last couple of years have pushed all of these markets higher. Growers and sellers of these commodities are anxious for harvest to arrive. They hope these prices hold and yields are good so they can capture a decent profit margin for their work. Farmers and ranchers live with market volatility year in and year out. High prices bring both optimism and anxiety as producers know markets can turn around dramatically over short periods of time. They also know production losses sting a little more when they represent lost opportunities to market farm output into a high market. In this article, we examine market volatility for each of the above farm outputs. We take a historical look at variability in price outcomes, and add perspective on tools available to manage this risk at this point in the season.
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