DNA Dialogue – Avoiding Black Swan Events

January 18, 2024

Dr. Galen Erickson, Professor of Ruminant Nutrition at University of Nebraska Lincoln, talks about avoiding black swan events and various strategies of risk management in this DNA Dialogue episode.

 

Video Transcript

[Music]

Narrator: DNA Dialogue is brought to you by Igenity Feeder powered by Neogen.

TITLE CARD: DNA Dialogue — Igenity® Feeder — powered by Neogen®

[The screen shows Dr. Galen Erickson speaking.]

SUPERIMPOSE: Galen E. Erickson, Ph.D., Professor of Ruminant Nutrition at University of Nebraska-Lincoln

Dr. Galen Erickson: There's certainly risk for producers. Because of the financial stake we have in the cattle operations, we really need to protect our risk. Especially when there's things outside of our control that are happening in the industry. Whether that's the general public- or beef-centric issues within our industry, things such as Black Swan events that we talk about.

[The screen shows a herd of beef cattle moving through a feedlot.]

Dr. Galen Erickson: So what can producers do to help minimize those risks is really very much from individual to individual.

[The screen shows a cattle truck driving around the feedlot.]

Dr. Galen Erickson: If you're able to withstand some of that risk and don't feel like you need to protect yourself you know that's that's a risk management strategy in itself just saying I'm not going to have a risk management strategy.

[The screen shows Dr. Galen Erickson speaking.]

Dr. Galen Erickson: I think, though for most people, taking into account that these events that may be out of our control: "what am I willing to stand?" and "how much risk do I need to protect?"

[The screen shows an aerial view of a feedlot.]

Dr. Galen Erickson: So there are ways to do that. Obviously, there's the traditional ways of helping decrease your risk exposure, such as futures. Obviously, there's a LRP program now, as well as, options, like put and take.

[The screen shows Dr. Galen Erickson speaking.]

Dr. Galen Erickson: So I think if you are at risk of financial catastrophe and can't withstand some of those events that are outside of our control, you should really consider those different strategies. More so, on the other side, is frankly one way to manage risk is to always have continuous turnover cattle and marketing windows across more times of the year.

[The screen shows beef cattle in a feedlot. The screen then shows beef moving through an auction ring.]

Dr. Galen Erickson: So, for example, if I'm always marketing my calves as weaned calves. I'm really at the risk of: "what is the price every time in the fall on my marketing date?"

[The screen shows Dr. Galen Erickson speaking.]

Dr. Galen Erickson: Whereas if I market a few dates, maybe I just slowly transition into going from one marketing date to three. Hold on to some of the calves maybe put some extra weight on them I spread out my marketing windows.

[The screen shows beef cattle being loaded onto a truck.]

Dr. Galen Erickson: That's one way to also manage risk.

[The screen shows Dr. Galen Erickson speaking.]

Dr. Galen Erickson: If you're a feeder, of course, the other way is you're continuously marketing cattle and continuously refilling those pens, again, that's a marketing strategy that minimizes risk across different times.

[Music]

TITLE CARD: DNA Dialogue — Igenity® Feeder — powered by Neogen®

TITLE CARD: Neogen logo. Igenity Feeder.

[The screen shows graphics of two cows eating corn from a trough. The camera zooms in on the far cow to reveal the DNA structure of the cells.]

Narrator: Are you a cattle feeder looking to manage for a stronger and more profitable set of cattle? Look no further than Igenity® Feeder. Igenity Feeder utilizes DNA to gain insight into your cattles genomic potential.

SUPERIMPOSE: Performance. Quality. Economic Endpoints.

Narrator: With the information to predict performance, quality, and economic endpoints for cattle feeders. Animals are scored and ranked in a simple format, driving more precise and accurate management decisions.

[The zooms out to show the graphic of two cows eating corn from a trough.]

SUPERIMPOSE: The Power to Predict.

Narrator: Igenity feeder gives you the power to predict days on feed, manage variability within lots, characterize carcass performance, and focus on metrics important to you and your operation. With the data provided you will identify superior animals earlier and maintain high operational efficiency. Maximize your profit and optimize performance with Igenity Feeder.

TITLE CARD: Neogen logo. Igenity Feeder.

[Music]


Category: Beef, Dairy, Igenity® Profiles, FAQs