Margin calls in a rapidly rising market

The feeder cattle market has been on a tear since fall of 2022. In most markets, heavy feeders are selling for $30-$50/cwt. more than they were in the fourth quarter. The price improvement in calf markets has been even greater. The August Chicago Mercantile Exchange feeder cattle futures contract that was trading below $200/cwt. in early fall is now trading in the mid-$230’s (see chart below). There is much reason for optimism as many profit opportunities exist in the current environment. But sharp price increases can also create challenges for producers, and I wanted to specifically…