What are Live Cattle?
When calves and yearlings are moved to a feedlot, they become ‘feeder cattle’. In this feedlot, the cattle (weighing around 600-800 pounds) are fed food that encourages rapid weight gain. The animal is considered ‘finished’ or 'live cattle' when it reaches full weight and is ready for slaughter. This is generally around 1,200 pounds.
Uses of Live Cattle
After a cow generally produces a dressed carcass around 745 pounds, the cow is sold for slaughter to a meat packing plant. Both live and feeder cattle futures contracts are traded in cents per pound.
Risks of Live Cattle
There are several risks associated with trading cattle. One such risk is changing weather, this effects the cost of the animals’ feed (i.e. grain, corn and sugar syrup). Conception rates should be considered as well as other factors such as the prices of gain, whether the young animals survive and possible death during shipment. There is also the ever present risk of disease.