Livestock Indemnity Program: A Case for Managing Risk with Good Recordkeeping

Keeping good records is an important risk management tool for agricultural producers. Good records provide accurate, complete and consistent information that leads to better decision making. Good records also keep the farm or ranch operation in a good position to participate in USDA programs when those opportunities are available. The Livestock Indemnity Program (LIP), one of the USDA disaster assistance programs administered by the Farm Service Agency (FSA), is an example of how good recordkeeping can be rewarded. LIP provides compensation to eligible livestock producers who have suffered livestock death losses in excess of normal mortality due to adverse weather, such as blizzards, floods, extreme heat, extreme cold, wildfires, tornadoes, and lightning. LIP also covers attacks by animals reintroduced into the wild by the federal government or protected by federal law, including wolves and avian predators. Eligible live-stock includes beef cattle, dairy cattle, bison, poultry, sheep, swine, horses, and other livestock as determined by the U.S. Secretary of Agriculture. The LIP payment rates are based on 75 percent of the market value of the livestock

Managing Cattle Market Risk with LRP Insurance

Price and market uncertainties pose a significant risk to cattle producers with a substantial amount of money invested in breeding livestock, land, and other infrastructure. Price protection through the Chicago Mercantile Exchange (CME) futures contracts and options can be used to help mitigate this risk but, in the case of futures contracts, they can also introduce financial burdens in the form of margin calls. Furthermore, many medium to small-scale producers prefer not to get involved with trading futures and options contracts

Six Key Components of a Farm or Ranch Business Plan

Developing a good farm or ranch business plan can have many benefits. In an earlier Cornhusker Economics article, I outlined six good reasons to develop a business plan (Parsons 2015). It helps to get your business organized and moving in the right direction. It lets your lender know you have a plan to succeed, which opens up your access to capital. It also helps you organize your thoughts, clarifying the goals and objectives you wish to achieve. In summary, putting together a written business plan increases the likelihood of your business achieving success (Scarborough 2011)

Smart Choices in Agriculture

Smart Choices in Agriculture (Figure 1) is a process designed to provide agricultural producers with a solid foundation for consistenly making good decisions in a very challenging environment. Besides operating in the presence of an incredible amount of uncertainty, farmers and ranchers typically make decisions with multiple short-term and long-term objectives in mind. They have a lot of things they are trying to accomplish with the choices they make on a regular basis. Sorting through information to arrive at the best choice can be a bit of a challenge when information is deep and time to process seems short. It has been proven that people can learn to make better decisions (Spetzler, et al.) Smart Choices in Agriculture presents an opportunity for agricultural producers to build those skills so the can consistently implement the best decisions for their operatio

Managing Calf Market Risk with LRP in 2023

When profit margins are strong, livestock owners have a natural tendency to relax a bit and enjoy the business of producing animals. Expansion may come to mind and effort is often put forth to improve production output. Protecting market price may become a secondary priority. However, a lot can happen between now and marketing time. Price trends can suddenly turn and quite often expectations may not be met. Protecting price should be just as much — maybe more — of a priority when the price outlook is optimistic, as it is in a downward trend. An unprotected, overly optimistic price forecast can hurt your bottom line just as easily as a downward trend that suddenly gets worse

ABSTRACTS OF PAPERS Presented at the 16th International Pectinid Workshop Halifax, Nova Scotia, Canada May 11–18, 2007

VIMS Author Contributions: Scallop dredge selectivity: A review of sequential ring size increases from 1994 to 2003 in the US sea scallop fishery By: DuPaul, William D.; Rudders, David B. Pages: 1307-1308 Industry-based sea scallop dredge surveys in support of rotational area management By: Rudders, B.; DuPaul, William D. Pages: 1337-1338 Size-selectivity of the commercial northwest Atlantic sea scallop (Placopecten magellanicus) dredge By: Yochum, Noelle; DuPaul, William D. Pages: 1355-135

Is a Higher Calling Enough? Incentive Compensation in the Church (CRI 2009-011)

We study the compensation and productivity of more than 2,000 Methodist ministers in a 43-year panel data set. The church appears to use pay-for-performance incentives for its clergy, as their compensation follows a sharing rule by which pastors receive approximately 3% of the incremental revenue from membership increases. Ministers receive the strongest rewards for attracting new parishioners who switch from other congregations within their denomination. Monetary incentives are weaker in settings where ministers have less control over their measured performance

Crop-Livestock Diversification and Efficiency in Agriculture

Diversification is a familiar strategy for managing risk in agriculture. It can take several forms including growing more than one crop or operating a farm with both crop and livestock enterprises. As with other strategies for managing risk, diversification comes with a unique set of costs. Managing a farm with multiple enterprises creates additional overhead as well as additional demands on management, labor, land, capital, and other resources. Diversification adds complexity to an operation and too much complexity can lead to inefficiencies

ECONOMICS OF VARIABLE SWINE GROWTH

This paper addresses the economic impacts of swine growth variability. Different economic penalties are determined to be associated with over-finishing versus under-finishing an animal. Marketing decisions based on the pen average are determined to be insignificantly less than optimal for a case study data set of 350 swine. Sensitivity analysis is conducted to determine the impact of increased growth and price variability.Livestock Production/Industries,

Risk Scenario Planning Tool for Education on Livestock Risk Protection Insurance for Feeder Cattle

It can be difficult to provide livestock producers with effective education on livestock risk protection (LRP) insurance. Recently, the RightRisk Education Team developed a risk scenario planning tool that applies a partial budget analysis approach to decision making under uncertainty. A case study for use with the tool was developed for educating producers about the U.S. Department of Agriculture Risk Management Agency\u27s Livestock Risk Protection Insurance Plan for Feeder Cattle. We have found the combination of the tool and case study to be effective in developing producers\u27 understanding of LRP insurance to a level at which they feel comfortable analyzing the decision of whether to purchase the insurance