I overheard my grandfather and uncle talking one day, and they were mad at another farmer. Back then, we had two livestock auction barns in our area. It seems one auction barn was consistently selling livestock at a higher price than the other auction barn.
One enterprising farmer was buying cattle and hogs at one auction at a low price. He would then take them over to the other auction, and sell them at the higher price. His only cost was gasoline to chauffer the cattle and hogs from one auction to the other.
This upset my grandfather and uncle. This farmer was playing the difference in the sale prices. I figured if he could get away with it, great, but it seemed to be too speculative for me. You never knew when the price would change…………..
A couple of years ago, I was talking to the operator of the local feed mill. I asked him about purchasing some calves. It was February. He mentioned, now would be the time to purchase calves before the price jumped.
It reminded me of when I was a teenager. We lived on 2 1/2 acres. Dad always had a couple of hogs and a few calves. He noticed that the price of calves jumped around April. He started buying bucket calves in January, and selling them in April. Keeping them for about 90 days and profiting in the jump in price….
Its kind of like the stock market. Playing the price difference, buying low and selling high. Other than stocks and cattle, can you think of anything that jumps in price seasonally? More importantly, can you profit from it?
