Livestock Marketing Recommendations

Livestock Marketing Recommendations 

MNWestAg works with individual producers to personalize marketing stratgies for them. Because of the many variables involved with livestock production we do not make blanket recommendations. We do follow a generalized philosophy for each species of livestock as we work with each producer.

Hogs: We tend to work with seasonal profitability trends and protect the time frame of seasonally lower prices while staying open during time frames that often offer seasonal profits. Direct hedges or option windows are the most common marketing tools used.

Cattle: We use seasonal trends to lock in profits or establish price floors. Direct hedges or option windows are the most common marketing tools used. Seasonal profitability trends are used to evaluate the strategy and implementation of the plan.

LRP and LGM Insurance programs

Livestock Risk Protection (LRP) Insurance covers the risk of price declines for feeder cattle, fed cattle, and swine. It provides producers an indemnity if a regional or national cash price index falls below an insured coverage price. Similar to a put option, the LRP policy is price insurance only, providing single-peril price risk protection for the future sale of insured livestock.

Livestock Gross Margin (LGM) Insurance offers protection against a decline in the feeding margin for cattle and swine. An indemnity is paid if the insured gross margin is greater than the total actual gross margin at the end of the insurance period.

Both insurance policies are available through the crop insurance agent system. Neither of these products guarantee a cash price received as the producer's actual cash market selling price is not used to determine indemnities. LRP and LGM Insurance programs allow producers to customize these products to their individual needs and efficiently manage price risk without the use of the futures market.

To learn more about LRP and LGM, take advantage of the University of Nebraska-Lincoln's online study guides, lecture series, and resource centers.

RMA - Livestock Insurance Policy Links

U of NE - LRP and LGM Insurance Resource

Minnesota West Ag Services, LLC is an equal opportunity provider and employer.