FCStone’s Food Service group can help protect meat prices by using a multiple of OTC derivatives, exchange traded futures and options, and cash markets.  One specific OTC product uses the USDA boxed beef index to hedge forward beef purchases or sales.

The contract price is derived from the daily USDA Boxed Beef cut-out values and represents 40,000 pounds of beef per contract.  Settlement dates and quantities are determined by the customer’s needs. 

Why?

•  To offset meat price risk and protect margins.

•  The USDA Boxed Beef Index correlates at a much higher percentage
   to meat prices than Live Cattle futures to meat prices.

•  The contracts are flexible and can be customized to your needs.

•  It is an independent price index, eliminating any chance of price
   manipulation

•  To protect prices on anticipated usage.