Senior Farm and Ranch Broadcaster, Ron Hays, is featuring comments from Farm Director, KC Sheperd’s visit with Vice President of Operations at Farm Data Services and Oklahoma cattle producer Clay Burtrum. Butrum talks about the “ins and outs” of Livestock Risk Protection.
Livestock risk protection, Burtrum said, was created about 25 years ago. LRP is a risk management tool for all livestock producers and is eligible for anyone who wants to have a floor and buy insurance on their cattle.
“It is not a morbidity policy,” Burtrum said. “This is a price protection program.”
With prices as high as they are, Burtrum said it is critical to protect those high investments.
“We are really going to see those numbers start to climb, so when you look at the bottom dollar of what these prices are, we have to learn to protect them,” Burtrum said.
Thirteen weeks is the minimum contract that can be purchased, Burtrum said, and the maximum contract is 52 weeks.
“It is available for steers, heifers, and brahman influence, dairy influence, and then even the unborn,” Burtrum said.
This means if producers preg-check their females, Burtrum said the 2024 calf crop can be insured beforehand.
“It is very basic,” Burtrum said. “You are setting a floor on your cattle, you are leaving your topside potential open, and you just have a floor. You are able to sleep at night knowing you have those cattle locked in.”
If the market goes higher, Burtrum said producers will still get that price, but by purchasing protection, they have a floor price just in case.
“Let’s rewind and remember the cow that stole Christmas in 2003, December the 23rd,” Burtrum said. “I had six computers running trying to write LRP for everybody in the country that I had talked to about this. We don’t know what is going to happen in this cattle market.”
There are different levels of coverage to fit each producer, Burtrum added.
“You have to buy the insurance from a licensed livestock insurance agent,” Burtrum said. “Most crop insurance agents have taken the class, and they are licensed to sell LRP. If they are not, then just get online and look at different agents in your area, or you can call me at Farm Data Services, and I will be happy to help you walk through the LRP.”
Producers applying for LRP will fill out a one-time application form, Burtrum said, which will be submitted to the insurance company.
“You also need to make sure have an AD-1026 on file at the Farm Service Agency,” Burtrum said. “Many of us who participate in farm programs already have that submitted, and it is on file. At that point, you decide what level of insurance you want.”
LRP settles against the feeder cattle index, Burtrum said, which is a seven-state area average of all of the sale barns, country sales, and Superior video auctions.
“What that is, is the average of 700–900-pound steer, basically an 800-pound steer, is what the feeder cattle index is on a daily basis that is calculated,” Burtrum said. “That is the insurance price that you settle against.”
The key things about LRP, Burtrum said, are producers do not have to sell their cattle, it is not a morbidity policy, and it gives producers the peace of mind to sleep at night knowing they have a floor on those prices.
Burtrum said producers can reach him at his cell at 405-747-9865.
“I am happy to talk to anybody about LRP and what this looks like for you,” Burtrum said.
To listen to KC Sheperd’s full interview with Clay Burtrum, CLICK HERE.
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