Minding Ag's Business

The cattle market is a bit baffling right now. Feedlots are full. Prices are high.

"Everything looks great, but it doesn't necessarily all make sense," said Cody Dvorak, ag insurance services manager with Rabo AgriFinace. He's not a marketing expert and doesn't like to speculate on where the market is heading, but he does help cattlemen understand Livestock Risk Protection (LRP) insurance, which helps insure against a decline in prices.

While LRP has been around for more than a decade, changes to the rules around selling policies have made it easier to access, while higher subsidy rates have made it more affordable.

There are some changes coming for 2025, which technically begins in July. Dvorak will explain those changes as well as the ins and outs of how producers can use LRP to manage their operations' downside risk on June 14, 2024, during DTN's Ag Summit Series: Navigating the Cattle Market's Ups and Downs webinar.

In many ways, LRP is like buying car insurance, he said. You wouldn't buy a new car and wait five years to insure it. You want to buy higher levels of coverage while the vehicle has a higher value.

"Valuable things are worth insuring," he said, adding that LRP can help farmers "entertain current values for up to a year longer than they may last."

DTN Livestock Analyst ShayLe Stewart will address the question of how long current prices may last.

Stewart will explain how she analyzes the market's long-term bullishness amid so many bearish surprises. She'll look at the market's current state in the wake of recent sales and discuss both the opportunities and risks ahead for cow-calf producers.

"As producers and commodity traders alike all know, the cattle complex operates in a cyclical cycle, but the current bullish upturn isn't anything like what the industry saw back in 2014. The market possesses an all-time low inventory of beef cows, fed cattle prices have scaled to new highs and the feeder cattle market has never seen demand like this before," she said.

"But higher prices don't necessarily guarantee profitability, and cattlemen know that eventually the tide will turn, and prices will soften again, which is why it's important that we discuss the long-term outlook of the cattle complex and discuss the current fundamentals at play."

The DTN Ag Summit Series webinar begins on Friday, June 14, at 8:30 a.m. CDT. You can register for free here: https://dtn.link/….

Katie Dehlinger can be reached at katie.dehlinger@dtn.com

Follow her on social platform X @KatieD_DTN

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