Early in the year is a good time to reflect on price trends and consider price expectations. At the local level, one way to do that is to look back at basis levels. Basis is the difference between a cash price and a nearby futures price. For feeder cattle, the basis tends to be positive in the northern plains, meaning the cash price is higher than the futures price.
For example, South Dakota feeder cattle are included in the CME Feeder Cattle Index, thus the basis reflects quality differences and location rather than weight differences. Is basis stable? Does it matter? Monthly feeder…
