Senior Farm and Ranch Broadcaster Ron Hays caught up with Dakota Moss, Livestock Risk Services President, to discuss LRP and potential alternatives that may fit some producers’ needs better as the year’s final quarter brings increasingly dry conditions.
As they plan their strategies going forward, producers have to consider how many animals their forage will last and for how long.
“Here at Livestock Risk Services, we specialize in Livestock Risk Protection,” Moss said. “If someone is looking to take cattle all the way to March and May next year on wheat pasture, they need to look at some different options compared to LRP.”
When cattle are put on an LRP policy, a producer must own the cattle to within sixty days of the end of the policy. For example, cattle in an LRP policy set to expire on May 28 cannot be marketed until March 29th, sixty days prior to the end of the policy period.
“For a producer wanting wheat pasture calves this fall, LRP may not be an option,” Moss stated. “Because if they run out of forage or if the wheat doesn’t even come up, they may be better off talking to a broker about hedging or puts or calls options and use those more flexible strategies. LRP is a great tool, but once you put those cattle on that policy, you can’t get out of it until it expires.”
If cattle on an LRP policy do have to be marketed prematurely, their coverage is voided and the full premium is still owed. Moss suggests that you carefully consider your production options this fall and winter before utilizing LRP on stocker cattle you may have on your place.
A good use of LRP is to put a floor of protection under baby calves, even before birth. Moss said, “There are so many unknowns between right now and the fall of 2025. We saw the September feeder contracts start trading today on the board, so we will start seeing LRP prices for September and October of next year over the next thirty to sixty days.”
He urged producers to look hard at covering next year’s calf crop now before they even hit the ground. Late August numbers, which is as far as can be anticipated for unborn calves at this time, show coverage for a 599-pound calf to be $1,560 with a $60 premium per head.
“With the uncertainty of the world right now and the volatility in the cattle market that is so impacted by our economy, make sure you are using the tools at hand to secure that profit margin for next year,” Moss concluded.
The services of Livestock Risk Services can be accessed at livestockriskservices.com, and while their home office is in the Oklahoma City Stockyards, agents have the state well covered. Livestock Risk Services agents are also licensed in nearly the entire continental United States.
The Beef Buzz is a regular feature heard on radio stations around the region on the Radio Oklahoma Ag Network and is a regular audio feature found on this website as well. Click on the LISTEN BAR at the top of the story for today’s show and check out our archives for older Beef Buzz shows covering the gamut of the beef cattle industry today.
