Ol' Hippie > wrote:
>Anyone know the going price for beef on the hoof?

US$0.80/lb and dropping. It was $1.00 two weeks ago.

http://futures.tradingcharts.com/chart/FC/14

(What follows is from memory, so ymmv).

The government imposes futures trading price change limits
like the circuit-breakers on the stock markets, with a twist.

The limit starts at 1.5 cents per day. But if the move
pegs at 1.5 cents in the same direction two days in a row,
it goes to 3 cents. If it pegs again, it goes to 5 cents.

If during any of this it doesn't peg one day, the limit
drops to the next lower one (3 cents if it's already at
5 cents, and so on).

The limits prevent manipulations from being too successful,
and they give the government time to stop manipulations or
spin away fear from natural disasters such as this mad-cow
thing (although all they've done so far is scare people
even more than necessary, and really, how hard would it
be for the POTUS to grab a mad cow from somewhere else
and have it show up in an American herd, then make up a
few press releases...). The limits for futures *options*
are quite another thing, and the idea of an option on a
future just blows my mind, so I don't need to go into it.

Oh, and there's a whole page of rules and formulae for
figuring out what the 80 cents/lb is for, considering how
variable cattle can be in size and quality. Nominally,
it's for a given mix of "Select" and "Choice" graded
cattle none of which is ill to a certain degree on the
day of delivery. The contract is for 40,000 lbs,
so 80 cents/lb works out to about $32K/contract.
Delivery consists of taking them from one company's
pen at the yard, checking them over, weighing them, and
leading them into another company's pen in the same yard.
Whether any trucks get involved before and after this is
not the market's problem.

As for the price at retail, I can assure you that Safeway
is still offering "Select" grade strip steaks for $9.49/lb.
They think I'm dumb. They need to read my stuff.

--Blair
"Me: Have any Choice?
Butcher: You never did..."