Newly updated resources from Iowa State University Extension and Outreach are available to help livestock producers track their cost of production and work through price insurance options.
The “Livestock Enterprise Budgets for Iowa” and “Livestock Risk Insurance Plans for Cattle Producers” are both available in the April edition of Ag Decision Maker.
The “enterprise budgets” publication provides estimates of production costs for common livestock produced in Iowa, using estimates that reflect average or above-average levels of management and expected input and output prices for 2021.
Producers are encouraged to enter their own costs for items like feed, labor, facilities, equipment and transportation. The publication helps producers understand and identify fixed costs (those that occur regardless of the level of production) and variable costs (those that vary according to the level of production).
Each of the eleven livestock enterprise budgets has a coordinating Decision Tool for producers to enter their own information or they can start with the same inputs as the ISU budget and make adjustments.
“We’ve set these budgets up so producers can insert their own on-farm numbers,” said Tim Christensen, farm management specialist with ISU Extension and Outreach. “The more accurate the input numbers are, the more accurate the numbers will be for each operation.”
The goal is to help producers think critically about the different costs and opportunities associated with each species, while providing different scenarios of what could happen throughout the year.
The publication on livestock insurance covers two programs administered through the farm bill, known as Livestock Risk Protection and Livestock Gross Margin.
The LRP program provides protection against price declines, while the LGM program provides protection against loss of gross margin (market value of livestock minus feed costs).
“Both programs are great ways for livestock producers to have some risk management protection against adverse price movements,” Christensen said.
The article provides an update on recent changes, which includes a higher level of subsidy available, and the ability to pay premiums at the end of the insurance period, instead of upfront.
Both products are available to producers of all sizes and must be purchased through an authorized insurance agent.
A Decision Tool comparing coverage levels for covered livestock species under the Livestock Revenue Protection program has also been updated.
This month’s Ag Decision Maker also includes a look at the “push-n-pull” factors supporting hog prices, written by Lee Schulz, associate professor in economics and livestock economist at Iowa State University.
