LRP Insurance Available to Help Cattle Producers Manage Risk
Tuesday May 11th, 2021 Cattle futures have been getting hammered lately on the sharply higher corn prices. And that has a lot of cattlemen and women talking about how they can manage risk and protect their bottom line.
Shawn Fladager is the branch manager for Northwest Farm Credit Services in Great Falls, Mont. and says there’s a risk management tool available called Livestock Risk Protection insurance that can help. The Livestock Risk Protection (LRP) has been around for over a decade now, said Fladager. It s a tool that has been available and offered by the Risk Management Agency, which is the governing body of crop insurance. It s a tool that you can use to help hedge the market for lack of a better term. If cattle futures have a sharp fall at the Chicago Mercantile Exchange, this program is designed to help protect producers from that.
The rising feedlot cost of gain in the southern Great Plains should have cattle producers considering economic opportunities for operations in forage-based stocker and backgrounding programs, said Oklahoma State University Extension experts.
Cost of gain, or the expense of gaining a pound of livestock bodyweight, involves several critical factors such as feed costs, flesh condition, animal genetics, weather and cattle health. When grain prices rise and cost of gain increases – as is currently the case – feedlot operators shift their favor to heavier-weight cattle.
“It’s all about adding value, though the producer still will need to determine the price needed to sell his or her fed cattle to break even on the transaction,” said Paul Beck, OSU Extension beef cattle specialist and holder of the university’s Dennis and Marta White Endowed Chair in Animal Science. “Determining the break-even price is just part of raising cattle, no matter the size or type of operation.
LRP Insurance Available to Help Cattle Producers Manage Risk
Tuesday May 11th, 2021 Cattle futures have been getting hammered lately on the sharply higher corn prices. And that has a lot of cattlemen and women talking about how they can manage risk and protect their bottom line.
Shawn Fladager is the branch manager for Northwest Farm Credit Services in Great Falls, Mont. and says there’s a risk management tool available called Livestock Risk Protection insurance that can help. The Livestock Risk Protection (LRP) has been around for over a decade now, said Fladager. It s a tool that has been available and offered by the Risk Management Agency, which is the governing body of crop insurance. It s a tool that you can use to help hedge the market for lack of a better term. If cattle futures have a sharp fall at the Chicago Mercantile Exchange, this program is designed to help protect producers from that.
BY USDA | April 29, 2021
RRN photo
The U.S. Department of Agriculture is updating livestock insurance policies to improve options for producers and to create additional opportunities for producers to participate. USDAâs Risk Management Agencyâs (RMA) updates to the Dairy Revenue Protection (DRP) and Livestock Gross Margin (LGM) policies will be effective for the 2022 and succeeding crop years.
âWe are always looking for ways to improve the insurance program and coverage for our producers,â said RMA Acting Administrator Richard Flournoy. âWe strongly feel that these updates will benefit producers and their dairy and livestock operations in the years to come.â