System and method for managing a portfolio of different cuts of meat

• US 8,341,058 B2
• Filed: 01/16/2009
• Issued: 12/25/2012
• Est. Priority Date: 01/16/2009
• Status: Active Grant

• Current Assignee: Future BEEF Partners Incorporated
• Original Assignee: Future BEEF Partners Incorporated
• Inventors: Sivasundaram, Lavan, Phillips, Jason, Ferraro, John
• Primary Examiner(s): Liu, Marissa
• Application Number:
  US12/320,117
• Publication Number:
  US 20100185554A1
• Time in Patent Office: 1,439 Days
• Field of Search: 705 1- 55, 715 2-200, 380195-233
• US Class Current: 705/36.R
• CPC Class Codes: G06Q 40/06 Asset management; Financial planning or analysis

Abstract

A system and method for modifying a portfolio having respective quantities of a plurality of different meat cut types (MCT) of an animal comprising: accessing portfolio information including a first quantity of a first MCT and a second quantity of a second MCT determining first comparison data of the first MCT and of the second MCT for a selected historical time period; determining a correlation value between the first MCT and the second MCT analyzing the correlation value and adjusting a parameter of a price model used in determining the first predicted future price and sending the modified value of the first price premium for presentation to a member of the portfolio.

Claims

1. A method for modifying a portfolio having respective quantities of a plurality of different meat cut types (MCT) of an animal, the method comprising the steps implemented on a processor of:

accessing portfolio information of the portfolio stored in a memory, the portfolio information including a first quantity of a first MCT and a second quantity of a second MCT, the first MCT having a first predicted future price for a first future time period (FTP) and the second MCT having a second predicted future price for a second FTP, the first and second MCTs being part of the plurality of different MCTs, the first predicted future price being a result from a first model expressed as a relationship between historical market prices of the first MCT and live animal futures contracts;

determining comparison data containing historical first market prices of the first MCT and historical second market prices of the second MCT for a selected historical time period;

determining a correlation value between the first MCT and the second MCT using the comparison and the first quantity and the second quantity, the correlation value representing a relative movement in price of the first MCT to the second MCT for the first and second FTP;

analyzing, by a computer, the correlation value and adjusting, by the computer, a parameter of the price model used in determining the first predicted future price in order to modify a value of a first price premium associated with the first predicted future price, the first price premium representing a monetary value in exchange for assuming a risk that the first predicted future price may be different from the eventual market price of the first MCT when reaching the first FTP; and

sending, by the computer, the modified value of the first price premium for presentation to a member of the portfolio for promoting either an increase or a decrease in the quantity of the first MCT in the portfolio.

2. The method of claim 1, wherein the parameter of the price model is a risk level defining a chance that the first predicted future price be within a specified price range when reaching the first FTP.

3. The method of claim 2, wherein the correlation value represents that a first price variation in the first comparison data is opposite to a second price variation in the second comparison data.

4. The method of claim 3, wherein the correlation value satisfies a predefined correlation magnitude threshold as a result of said analyzing of the correlation value before the first price premium is adjusted.

5. The method of claim 1 further comprising the step of adjusting a parameter of a price model used in determining a second predicted future price in order to modify a value of a second price premium associated with the second predicted future price, the second price premium representing compensation in exchange for assuming a risk that the second predicted future price may be different from the eventual market price of the second MCT when reaching the second FTP;

and presenting the modified value of the second price premium to the member of the portfolio for promoting either an increase or a decrease in the quantity of the second MCT in the portfolio.

6. The method of claim 5, wherein the modification of the price premiums is selected from the group comprising:

the first price premium is increased and the second price premium is also increased;

the first price premium is decreased and the second price premium is also decreased;

the first price premium is increased and the second price premium is decreased; and

the first price premium is decreased and the second price premium is increased.

7. The method of claim 3, wherein the first price variation and the second price variation are further based on comparison of the historical animal futures price data with respective said historical first market prices and respective said historical second market prices.

8. The method of claim 7, wherein predicted prices from the price model are used in determining the first price variation and the second price variation.

9. The method of claim 1 further comprising the step of determining further correlation values between other pairs of the MCT selected from the plurality of different MCTs of the portfolio for use in determining corresponding correlation values.

10. The method of claim 9 further comprising the step of analyzing the correlation values and adjusting parameters of price models corresponding to the other MCTs used in determining their corresponding predicted future prices in order to modify the values of price premiums associated with the corresponding predicted future prices.

11. The method of claim 1, wherein the first MCT and the second MCT of the portfolio are held by different members.

12. The method of claim 1, wherein the selected historical time period is selected from the group comprising:

a previous time period in the same calendar year as the FTP and a same time period in a previous calendar year as the FTP.

13. The method of claim 12, wherein the selected FTP is selected from the group consisting of:

a month;

a quarter of a year;

a selected combination of months;

a week; and

a day.

14. The method of claim 12, wherein the selected historical time period is selected from the group consisting of:

a month;

a quarter of a year;

a selected combination of months;

a week; and

a day.

15. The method of claim 1, wherein the first MCT is selected from the group comprising:

having the same meat cut MC with a different FTP;

having a different MC with a different FTP; and

having a different MC with a same FTP.

16. The method of claim 1, wherein the adjustment of the price premium is triggered based on detected and/or reported changes in respective quantities of at least one of the plurality of different MCT in the portfolio.

17. The method of claim 1 further including the step of including an error term in the price model, the error term defined as a relationship between the historical first predicted price of the first MCT and the corresponding historical first market price of the first MCT for an earlier time period prior to the first FTP.

18. The method of claim 1, wherein the animal is selected from the group consisting of:

cattle and hogs.

19. A method for modifying a portfolio having respective quantities of a plurality of different meat cut types (MCT) of an animal, the method comprising the steps implemented on a processor of:

accessing portfolio information of the portfolio stored in a memory, the portfolio information including a first quantity of a first MCT, the first MCT having a first predicted future price for a first future time period (FTP), the first MCTs being part of the plurality of different MCTs;

selecting a second quantity of a second MCT, the second MCT not being part of the plurality of different MCTs, a second predicted future price of the second MCT being a result from a price model expressed as a relationship between historical market prices of the second MCT and live animal futures contracts;

determining comparison data containing historical first market prices of the first MCT and historical second market prices of the second MCT for a selected historical time period;

determining a correlation value between the first MCT and the second MCT using the comparison and the first quantity and the second quantity, the correlation value representing a relative movement in price of the first MCT to the second MCT for the first and second FTP;

analyzing, by a computer, the correlation value and adjusting, by the computer, a parameter of the price model used in determining the second predicted future price in order to determine an adjusted value of a second price premium associated with the second predicted future price, the second price premium representing a monetary value in exchange for assuming a risk that the second predicted future price may be different from the eventual market price of the second MCT when reaching a second FTP associated with the second MCT; and

sending, by the computer, the modified value of the second price premium for presentation to a member of the portfolio for promoting addition of the second MCT to the portfolio.