Luke and Johanna and two ranchers located in the same area (so they sell their cattle in the same cash market). Both want to hedge cattle that they plan to sell in December. Luke chooses to use futures contracts while Johanna prefers to use options. Luke sold cattle using the live cattle futures contract for December delivery at $1.54/lb. Johanna bought puts on the live cattle futures contract for December delivery with a $1.54/lb strike and $0.03/lb premium.

Based on the information above, indicate whether you agree or disagree (or partially agree/disagree) with the statement below and explain why.

"If cattle prices are lower in December (say, $1.40/lb, $1.30/lb or even lower), the realized price for Luke's futures hedge will always be higher than the realized price for Johanna's put hedge. On the other hand, if cattle prices are higher in December (say, $1.70/lb, $1.80/lb or even higher), the realized price for Johanna's put hedge will always be higher than the realized price for Luke's futures hedge."