Producers have certainly noticed some changes taking place with the recently rebranded Livestock Price Insurance (LPI) program, formerly referred to as WLPIP. The calf insurance purchase deadline has been permanently extended into June, with the 2021 deadline set for June 10th and policy expirations available until February 21, 2022. Policy purchase hours are now available from 2-11 p.m. on Tuesdays, Wednesdays and Thursdays, and claim settlements are available on Mondays during the same hours.
These changes are meant to fulfill a risk management gap experienced by producers, and to provide additional opportunities to participate in a program that better suits the operational needs of producers who calve in late spring, summer or fall. To adhere to program parameters (36 week policy lengths), extending sales into June is required to offer settlements in January and February.
We discussed some of these changes and the overall program with beef producer Ed Lange. Ed runs about 650 mother cows on his family cooperative, cow calf to finish operation.
“We’ve bought LPI annually for roughly the last five years to use jointly with price protection by going through a broker, depending on the markets and price they can lock in,” said Lange. “Our main motivation for purchasing calf insurance is to protect our profit margins. It allows for planning and allows me to sleep at night knowing that I am not subject to market volatility.”
Lange says he can calculate his break-evens and expect the program to cover them along with some profitability, which makes purchasing insurance worthwhile for their farm. During COVID he knew they would be covered when the processing plants idled, and fat prices dropped. However, Lange does point out that he watches the market and waits for the right opportunity, acknowledging that buying into the program is not a blanket approach.
“We insure in 10 percent increments as opportunities arise and are satisfied that the price covers enough risk. While we find calf insurance works for our farm, there is room to make the program more flexible, through more specific weight breakdowns, for example.”
This article was first published in the May 2021 edition of ABP Magazine under “Livestock Price Insurance.” Stay tuned to ABP Daily to see more content from the magazine.