In a world where drought, market reports, and geo-political events pressure livestock producers risk management is becoming increasingly important. Faculty from Texas A&M AgriLife and Oklahoma State University came together to produce, “Where’s the Risk: A Livestock Risk Management Handbook.”
Dates & Deadlines
11/3/2022 – Overton Pesticide Continuing Education Units Program, Online
11/3/2022 – Grow More Grass with Prescribed Fire, Online
11/29 /2022 – 12/1/2022 – Amarillo Farm & Ranch Show
What We’re Reading
New publication to help livestock producers manage risks – AgriLife Today
Utilizing cornstalks in beef cow diets – BEEF
Groups sue EPA over delayed CAFO actions – BEEF
AFBF establishes 2023 farm bill priorities – Morning Ag Clips
Wheat soars as Russia backs out of Grains Initiative – Farm Futures
Just how much would a rail strike hurt farmers? – Feedstuffs
Livestock Risk Management Publication Available
Faculty from Texas A&M AgriLife and Oklahoma State University came together to produce, “Where’s the Risk: A Livestock Risk Management Handbook”, as part of a grant funded by the Southern Risk Management Education Center. This publication was developed to help producers of livestock and forage navigate the growing, and complex, safety net for their enterprises. It is currently available on the homepage of the Agricultural & Food Policy Center.
The publication includes an overview of three major subject areas:
- Programs offered by the USDA’s Farm Service Agency (FSA)
- Programs offered by USDA’s Risk Management Agency (RMA)
- Risk management using the futures market
The publication includes comprehensive analysis of tools designed to mitigate a variety of risks when producing forage, livestock, or both. The last three years, not to mention the normal cyclical dynamics of the cattle market, are a perfect example of the need to develop a marketing plan and a plan to manage the many risks facing producers.
The section on FSA programs is designed to help producers understand programs that provide relief in the event of disasters. It includes detailed reviews of:
- Livestock Forage Program (LFP)
- Livestock Indemnity Program (LIP)
- Emergency Assistance for Livestock, Honeybees, and Farm-Raised Fish (ELAP)
- Noninsured Crop Disaster Assistance Program (NAP)
- Other Ad Hoc Programs
Current Native Pasture Eligibility Map for LFP (Detailed in Publication)
The section on RMA programs provides an overview of risk management programs, i.e. insurance products available to producers of forage and livestock. It includes detailed reviews of:
- Annual Forage (AF)
- Dual Use Option
- Pasture, Rangeland, and Forage (PRF)
- Livestock Risk Protection (LRP)
- Livestock Gross Margin (LGM)
Map of Dual Use Option Availability (Detailed in Publication)
Finally, the chapter on risk management using the futures market is an introduction to different strategies for mitigating risk using futures and options. The chapter addresses:
- Hedging vs. speculation
- Budgets and establishing a break-even price
- Futures
- Options
- Seasonality
- Fundamental and Technical analysis
- Common hedging strategies
- Other uses of options
Graphical (1) and Numeric (2) Outcomes for Example Long Call (Detailed in Publication)
