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FCMS Overview

  • Eight feedlot teams of 2-4 people market fed cattle.

  • Four meatpacking teams of 2-4 people purchase fed cattle.

  • Cattle supplies are exogenously controlled and cycle from larger to smaller to larger supplies.

  • Cattle can be marketed/purchased any time during a five-week market window at weights ranging from 1200-1300 lbs.

  • Cattle genetics range from low quality, high yielding to high quality, low yielding.

  • Feedlots are penalized for feeding to excessive weights but packers have an incentive to purchase heavier cattle.

  • Each packer has a different cost structure and minimum cost volume.

  • Feedlot and packer teams negotiate sale/purchase prices in seven-minute trading weeks.

  • Cattle can be priced on a live weight, dressed weight, or grid method.

  • Teams can trade futures market contracts (one nearby and two distant contracts) and forward contract cattle.

  • The beef demand function is based on a nine-week polynomial lag model estimated with weekly beef industry data.

  • Market News reports within-week trading activity (volume, contracts, high and low prices) and end-of-week market summaries (volume, prices by weights, boxed beef price, cost of gain, feeder cattle purchase price).

  • Cattle on Feed reports are presented monthly.

  • Teams receive weekly profit/loss statements.

  • Ego awards, "Best team trophy" and "Best supporting team ‘gold and silver cow chips on a shingle’ trophy" are given monthly.

  • Each workshop ends with a "lessons learned" debriefing period and an evaluation form.