Cattle Futures Volatility Tests Risk Plans Despite History

K-State economists say big swings in cattle futures can complicate hedging, margin calls, and timing of sales.

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FarmHER, Inc.

LUBBOCK, TEXAS (RFD NEWS) — Cattle producers are facing larger dollar swings in futures markets as record prices meet tight supplies, strong beef demand, and geopolitical uncertainty. Kansas State University Extension economist Brian Coffey says those moves can complicate hedging, margin calls, and timing of sales.

Coffey says recent feeder and live cattle price moves feel larger because prices are at historically high levels. However, measured as a percentage of price, recent volatility is not far outside past market behavior.

Annualized 30-day volatility compares day-to-day percentage changes across time and commodities. For feeder cattle, 2025 and early 2026 have been volatile, but similar to several years since 2015.

Live cattle futures show a similar pattern. Recent relative volatility is comparable to much of the past 20 years, excluding the unusual market disruption seen in 2020.

The finding does not reduce the cash-flow challenge for producers. Higher prices mean larger margin exposure, even if markets are functioning normally. Risk plans should account for bigger absolute price moves.

Farm-Level Takeaway: Cattle producers should prepare for larger margin needs even when futures volatility remains historically comparable.
Tony St. James, RFD News Markets Specialist

Tony St. James joined the RFD-TV talent team in August 2024, bringing a wealth of experience and a fresh perspective to RFD-TV and Rural Radio Channel 147 Sirius XM. In addition to his role as Market Specialist (collaborating with Scott “The Cow Guy” Shellady to provide radio and TV audiences with the latest updates on ag commodity markets), he hosts “Rural America Live” and serves as talent for trade shows.

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