A Game to Help Cattle Feeders Understand Markets

source: Farm and Food Report

“Saskatchewan cattle feeders are very good at what they do,” according to Saskatchewan Cattle Feeders Association (SCFA) General Manager Jamie Blacklock, “but the industry is complex and constantly requires new skills,” she quickly points out.

“The Fed Cattle Market Simulator event will make our members work as competing teams in a virtual market environment they will be able to shape through their decisions. What better way to learn than a classroom setting with a registration fee of $85.00, instead of losing thousands of dollars to learn from real life experience?”

At the core of the March 31 and April 1 session at the Sandman Hotel in Saskatoon will be a tool developed by livestock marketing economists at Oklahoma State University and Colorado State University: the Packer-Feeder Game. It provides cattlemen an opportunity to sharpen their fed cattle marketing and purchasing skills in a fun, game-like environment. The game provides a realistic market for fed cattle and live cattle futures.

“A similar event was successfully held for Alberta cattle feeders in the fall,” says Blacklock. “We thought Saskatchewan feeders would very much benefit from this workshop as well.”

Participants role-play as cattle feedlot managers trying to market cattle at a profit, and as packing plant managers trying to buy cattle at a profit. Actions by players direct market prices.

Players learn to compute feedlot break-even prices for fed cattle; they find out how to estimate packer break-even bid prices for cattle and how to determine the number of cattle packers need; they bargain head-to-head to negotiate cash prices or forward contracts; and they learn to determine how to best market three genetic types of cattle either on live weight, dressed weight, or with a price grid.

Participants get to use the futures market to hedge sales or purchases; they use financial statements to plan their marketing/buying strategy; they see the dynamics of the market over time; and they discover who has the bargaining edge when cattle supplies are tight, as well as when cattle supplies are plentiful.

Blacklock says the response so far has been encouraging. “Everybody is quite excited about this opportunity. Word of mouth is getting around. The real-life aspect of this training session is a big draw among our members and outside the association.”

The number of participants is limited to 45.

For more information and to register for this event, contact the Saskatchewan Cattle Feeders Association office at (306) 382-2333.

For more information, contact:
Jamie Blacklock
Saskatchewan Cattle Feeders Association
(306) 382-2333
http://www.saskcattle.com

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