CARTHAGE, Mo. (RFD-TV) — Cattle producers continue to navigate market volatility and drought, making risk management an important consideration heading into the new year.
In Argentina, farmers face many of the same problems as their American counterparts, but overall, their outlooks for the future diverge greatly.
Researchers at Purdue University surveyed 400 farmers in each country and found that analysts tracking the figures believe farmers have different expectations for the future.
In the U.S., Colussi says the more pessimistic outlook likely reflects narrow profit margins, low commodity prices, and high production costs.
The biggest divide showed up in crop production. Fifty-seven percent of U.S. farmers expect bad times for crop farming over the next five years, while farmers in Argentina were much more optimistic.
Volatility Impacts Cattle Producer Sentiment Worldwide
“In Argentina, it was almost the opposite,” explains Purdue researcher Joana Collussi. “Fifty-three percent expected good times and only 4% expected bad times.”
Livestock producers were much closer in their outlook.
Eighty percent of cattle producers in Argentina expect good times over the next five years compared to 68 percent of U.S. producers.
“In Argentina, recent policy changes, including lower export taxes and greater market openness, may be helping improve expectations for the years ahead.”
U.S. Producers Seek Downside Protection
Jake Charleston with Specialty Risk Insurance joined us on Thursday’s Market Day Report to share how U.S. cattle producers are increasingly turning to livestock risk protection and pasture, rangeland, and forage coverage to accommodate increasing, long-term market volatility.
In his interview with RFD-TV, Charleston said the continued volatility in cattle markets makes downside protection an important tool for producers.
“I think it’s a necessity to have some downside protection,” Charleston said.
He pointed to Livestock Risk Protection, or LRP, as one way producers can protect against a decline in cattle prices while still participating if the market moves higher.
“Why not take this worry out of it? You know, go and put some downside protection on,” he said.
December 1 Deadline: PRF Coverage Helps Manage Drought Risk
Charleston also discussed Pasture, Rangeland and Forage, or PRF, coverage for producers dealing with uncertain rainfall.
He said PRF is a government-subsidized insurance program that provides coverage when rainfall falls short.
“So I mean, here we go with two programs, LRP and PRF, that are subsidized, which makes the premium cheaper and covers the two things that really we can’t control: the market volatility and the lack of rainfall,” Charleston said.
Charleston said producers can look into coverage, get a quote, and decide whether to cover part or all of their property.
“December 1st is a hard deadline to be signed up by,” he said.
Specialty Risk Meeting with Producers Around the U.S.
Charleston said Specialty Risk Insurance Agency continues to travel to industry events and meet with producers.
The agency recently became involved with the League of Their Own Auctioneer Contest, a year-long series held at sale barns. Charleston said the contest recently held events in Eldon, Missouri, and Unionville, Tennessee.
He also said the agency has Farm Fest near Springfield, Missouri, and World Dairy Expo coming up.
“We’re just staying on the road pretty consistently,” Charleston said.
LEARN MORE: specialtyrisk.ag
