Using Dual Objectives as Decision Guides to Hedge Oklahoma Feeder Cattle—An Economic Evaluation

The continued volatility of feeder cattle prices sustains interest in hedging strategies. The stocker operator may use technical or fundamental analysis for decision guides in the hedging program. Alternatively, the stocker operator could use profit objectives to guide the operator's hedging decisions. Previous works have developed strategies based on technical tools such as moving averages (Lehenbauer), point and figure analysis (Lehenbauer), and oscillators (Russell and Franzmann). Similarly, strategies have been developed that use fundamental analysis as a decision aid (Brown). However, no work has examined, in detail, strategies based on a management by objective philosophy—although at times the popular press has emphasized this approach (Farm Futures).