Where are these livestock prices going? If only we knew! But one thing we do know is by purchasing Livestock Risk Protection (LRP) you can ease at least some of the price worry. LRP is a way to protect your livestock investment against a decline in the market. The government quotes are usually published around 3:30 in the afternoon and are only good until 9:00 the next morning. Some agencies don’t work these hours, but we do!
LRP is similar to crop insurance in that it is sold at coverage levels and it is subsidized somewhere between 35% – 55%, depending on the level of coverage chosen. When your contract reaches its end date, the final price is calculated using the CME Feeder Cattle Index. This is based on sale barns throughout the Midwest (not just your local market). If the index falls below your contract’s coverage price, you will be paid the difference. Price Adjustment Factors will apply. If the index is higher than your coverage price, your policy expires worthless, but this often means you received a good price at your sale barn. It’s as easy as that! This policy is like putting a price floor on your livestock. Your banker likes it, and you sleep better. LRP coverage can be written on feeder cattle, fed cattle and swine. Give us a call and let us know how many head of livestock you will be marketing, what month you normally sell and what they will weigh at that time, and we’ll get you a quote with a coverage price and rate that best suits your operation.