Weaned Calf Insurance

Cow-calf producers in a few states will soon have a new insurance option to consider, Weaned Calf Risk Protection. USDA announced the risk-management product last week, stating it will be available to livestock producers in four states beginning in 2024.

The policy is part of the USDA's Risk Management Agency (RMA) program that offers Actual Production History (APH) coverage for beef producers to insure revenue from spring calving operations.

An APH policy is a type of insurance that protects against yield losses due to natural causes. Those causes include drought, excessive moisture, hail, wind, frost, insects and disease. With these new policies, coverage will be provided for a decline in price and loss of yield due to a decrease in overall weaning weights.

RMA Administrator Marcia Bunger said in a news release on the new coverage option: "The introduction of Weaned Calf Risk Protection reflects our priority to always pay attention to the evolving needs of producers and create options that can meet their unique situation."

Beginning Jan. 31, 2024, this program becomes available to cow-calf producers in the states of Colorado, Nebraska, South Dakota and Texas. Coverage levels between 50% and 85% will be available, as well as catastrophic coverage.

These policies are sold and delivered through private crop insurance agents. A list of agents is available at USDA Service Centers and online at the RMA Agent Locator.

PRICING METHODOLOGY FOR NEW COVERAGE

The RMA outlines in the paper "Regional Factors and Price Adjustment Factors Methodologies" how pricing will be determined for production losses on weaned calves as part of the new Weaned Calf Risk Protection coverage. These are feeder calves.

The methodology uses the following: (1) USDA Agricultural Marketing Service auction price data for the 23 price-determining states to produce a regional-weighted average price series for cattle between 200 and 750 pounds; and (2) Chicago Mercantile Exchange prices for feeder cattle.

The AMS price will consist of daily auction data compiled into weighted average monthly prices for the two respective regions included in this new coverage.

Texas falls into the South-Central region. Colorado, Nebraska and South Dakota fall into the North-Central region. The data used in this pricing methodology can be found at these sites: https://mymarketnews.ams.usda.gov/… and https://www.ams.usda.gov/….

To see a more detailed explanation of how this data will be used to calculate price for weaned calves, go here: https://www.rma.usda.gov/….

For more information about finding an agent, visit https://www.rma.usda.gov/….

Victoria Myers can be reached at vicki.myers@dtn.com

Follow her on Twitter @myersPF

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