Why learn about futures and hedging? Consider two producers, both of whom use excellent production methods.

The first sells livestock when they're ready for market; if cash market prices happen to be low at that time, he may lose money despite his best efforts and all his skill.

The second combines production and marketing skills. He knows his costs, understands his basis and scans cash forward and futures markets for profitable opportunities throughout the production period. If a good opportunity presents itself, he acts. In effect, his reach for profitable market opportunities extends way beyond the day or week he happens to send his livestock to market.

This kit is designed to educate producers and processors on combining production and marketing into a comprehensive business strategy. It all begins with understanding futures.