Managing financial risk is perhaps one of the most critical parts of being a successful livestock producer, and 2023 is challenging that premise for both cattle and hog producers. True, these challenges are coming in different ways.
An alternative way of managing risk is to use Livestock Risk Protection (LRP) and Livestock Gross Margin (LGM) insurance products.
LRP is a federally subsidized resource that allows producers to establish cash price floors on the exact amount of livestock that they own. It protects downside risk and leaves all the upside potential without margin calls or upfront premiums.
LGM can help producers remain whole when commodity and input prices are working against each other. This is a subsidized product that insures against live cattle and lean hog market declines, as well as increases in corn prices, soybean meal or feeder cattle prices. It works to protect the producer’s margin.
There are a couple of changes to the products that begin on July 1, 2023, which is the start of the 2024 LRP and LGM crop years.
- The end of LRP and LGM sales will now close at 8:25 a.m. CT, vs the current 9 a.m. CT.
- LRP Fed Cattle settlement will be moving to “Over 80% Choice.”
Frontier Farm Credit has dedicated teammates that hold expertise in livestock insurance products. Our team of experts can help with unbiased, financially driven risk management decisions. Here are some other important things to keep in mind when implementing LRP and LGM:
- The Frontier Farm Credit cooperative model has kept our focus on customer success. Your success is our success.
- Frontier Farm Credit has a strong understanding of a producer’s financial position and cash needs.
- We have top tier knowledge of livestock insurance products and commodity markets.
- The Livestock Insurance Analyzer tool that we provide our livestock insurance customers was developed by Dr. Marin Bozic, the leader of the Livestock Risk Protection and Livestock Gross Margin programs.
To learn more, visit our Livestock Insurance page.
