12 —Lancaster Farming, Saturday, December 10, 1966 • Cattle Futures (Continued from Page 1) of higher market prices for on pioduceis using this mar- (he coming year,” the commod kel as a legitinntc hedge. That ily specialist added. it had been successful in its PARASITES bnef hisloiy was illustrated In another phase of the meet by the fact that. last year, eat- mg, Dr. John R. S Fishei. di tie futuies was the third most lector of research for John W. common commodity traded on Eshelman & Sons, discussed the ExJnngc. RecJ told the his company’s solution to the cattlemen "And this year it's industry-wide pioblem of in ex en more active, ’’ he added ternal paiasites in beef cattle Reed quoted a statement bv Ixose Cattle Wonner an official of the Ameiican “Paiasites lowei an animal’s Meat In ‘itnte. an oigamza- icsistarce to other conditions, lion which had ongm.illv op such as shipping fever.” Fish posed ’he intioduction of cat- ei ‘ Woims in cattle used tie fu’uies tiading on the Ex- be considered a legional change, but later leveised its problem, he said, but with stand "Futuies trading tends today’s widespread movement to conti ibnte to puce stability cattle particularly from An nulustiy able to hedge be- south to north this is no comes more financially stable t° n S ei ’ true and attiactive to investment explained the advantages capital ” the mdustiyman said of the modern wonnmg meth- But. Reed explained, theie °d over the old phenothiazine are two phases to futures trad- treatment, and said that in mg hedging and speculating some experimental instances a “When you own the cattle and i®turn of $4 for every $1 in the futuies contract, that’s not vested had been noted During hedging, that’s speculating.” he the question period it was ob sai£j “ served by the Eshelman terri tory manager Richard Stein that the costs of such a worm ing program are approximate ly $1 for each 500 pounds of live weight. A four-member panel made frequent contributions to the discussion and question period. The panel consisted of For ney Longenecker, cattle feed er and president of the state Young Farmer Assn., Milton Marshall, buyer for Cross Bros; Robert Heilbron and James Dunlap, both of the Lancaster Livestock Exchange. . As an example of how a oat tie feeder might trade futures as puce insurance, Reed sug gested the following situation “In November you buy feed er cattle at $24 per hundred- weight You know from ex pel lence it will cost you $22 per hundredweight to finish those cattle at 1000 pounds. and you know they’ll be icady to move next October On con sulting the paper, you see Oc tober futuies at Chicago are listed at $24 You know right away that if you sell a futures contract for October at $24 you’re assured of $2 per hun diedweight profit “When October around, the cash, market in Lancaster is $25 You sell This gives you a $3 isturn per bun dled weight over your costs But the minute you sell, you’ie no longei hedged So you im - mediately buy back a futures contract at the then current price of $25 per hundied weight You have lost SI in Chicago on the exchange of conti acts “If you had speculated on the market advance instead of hedging, you wouldn’t have lost that $1 in Chicago But the hedge guaianteed you $2 piof it with no worry about what the October cash price would be ” In explaining the mystery of the futures trading mar ket, Reed told the cattlemen that, “The important thing that makes this process work is that the futures market and the cash market tend to move together.” Reed explained how a cattle feeder goes about negotiating a conti act and elaborated on some of the costs involved Among other things, he told the cattlemen that one trading unit on the Mercantile Ex change is 25,000 pounds of live beef, oi appioximately twenty five, 1000-pound steei s ‘The peison who sells you the contract is the speculator He's belling, in effect, that the puce will go up It doesn’t matter to you which way the cash maiket goes, you’ie hedged ” Reed said CATTLE OUTLOOK Reed did double duty in fill ing in foi another scheduled speakei national commodity specialist in ..Reynolds & Com pany’S New York office, Amner Biddle Duke, whose subject vas to have been the outlook for beef cattle The general tone of the out look is optimistic, Reed said Ranchers will retain moie bi eeding animals rebuild their herds: this rise in the fat cattle market. "The clock is running in favor ' / i TOYS GIFTS Games Groff's Hardware New Holland Open Thurs. & Fri, Eye Til 9 comes Ikok'S'S mi 1 1 \ fnost:-line / Lightweight aluminum makes this shovel easy to handle The bright blade is wide ribbed, has a carbon steel wear strip to give it extra life, give you extra value Hardwood handle has smooth new, sable finish. I* 5 Available From your feed and FARM SUPPLY DEALER Distributed by New Holland Supply Co., Inc. BANK HOURS: Main Office, Millersville and Manheim Tvvp. Branch; Mon. thru Thurs. 9 a.m. to 3 p.m.; Fri. 9 a.m. to 6 p.m. Lititz Branch: Mon. thru Fri. 8 a.m. to 2 p.m.; Fri. 5 p.m. to 7:30 p.m. All Drive In Windows and Walk Up Window Open Until 6 P.M Monday through Friday except Manheim Twp. Branch open ’til 8 p.m. Fri, MILLERSVILLE BRANCH LITITZ SPRINGS BRANCH MANHEIM TWP. BRANCH 302-N. George-St. Broad &, Main Sts., , v 1415 LititzPike, Lancaster Maximum Insurance $15,000 per depositor Member Federal Deposit Insurance Corporation Santa s Gift Suggestion For You Open A Savings Account With Us THE “Serving Lancaster from Center Square since 1889” A Trustee for the Lane. Co. Foundation % ' = / > : * * * * , * , * * * > t, . - i i I * LANCASTER, PENNSYLVANIA >Ui t w* ' A" / FREE PARKING at places listed below. Bring parking ticket to Bank for validation Any Buhrman Parking Lot Grant Street Parking Lot - 48 W. Grant St. Kendig Parking Lot - 36 S. Queen St. Hager’s Watt Sc Shand Parking Garage Swan Parking Lot - Vine & Queen Sts. Stoner Parking Lot Corner Vine & Queen Sts. AL BANK *&g&. *i >*,* s % r V; s .• v V 'if"