The Changing Role of Risk in Livestock Production Management

Conference Organizers

Extension Risk Management Education Pre-conference Organizers:

C. Wilson Gray Department of Agricultural Economics and Rural Sociology, University of Idaho Kevin Klair Shannon Neibergs Center for Farm Financial Management, University of Minnesota Western Center for Risk Management Education, School of Economic Sciences, Washington State University

Pre-Conference Theme

Risk has largely been transferred from crop production to livestock production • Energy Policy Act of 2005 and Energy Independence and Security Act of 2007 are responsible for establishing U.S. ethanol markets that have increased corn price trend and price volatility and increasing farm income.

www.lmic.info/tac/spreadsheets/spreadsheets.html www.ers.usda.gov/data-products/farm-income-and-wealth-statistics.aspx

IOWA MARKET HOG PROFIT

Farrow/Finish, Monthly $/Head 60 40 20 0 -20 -40 -60 2004 2005 Latest Data: January 2013 2006 2007 2008 2009 2010 2011 2012 2013 Livestock Marketing Information Center Data Source: Iowa State University 03/15/13

AVERAGE RETURNS TO CATTLE FEEDERS

Feeding 725 Lb. Steers, S. Plains, Monthly $ Per Head 275 225 175 125 75 25 -25 -75 -125 -175 -225 -275 -325 2004 2005 2006 2007 2008 2009 Latest Data: February 2013 2010 2011 2012 2013 C-P-22 03/15/13 Livestock Marketing Information Center Data Source: USDA-AMS & USDA-NASS, Compiled & Analysis by LMIC

Pre-Conference Theme

Risk has largely been transferred from crop production to livestock production •

Drought

We recall no time in our careers in which weather has been so important to both grain and livestock producers as it is this year.

Daily Livestock Report Steve Meyer & Len Steiner, March 15, 2013

Pre-Conference Theme

Risk has largely been transferred from crop production to livestock production •

Producer effective crop insurance program.

Federal Crop Insurance Corp Loss Ratios Loss ratio > 1.0 means indemnity received > premium payment

1995 to 2011 Federal Crop Insurance Corp Loss Ratios Schnitkey, Gary, Drought and Crop Insurance Loss Experience in 2012, Farmdoc Daily, March 19, 2013

Pre-Conference Format

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Agenda

Brian Gould, Risk Management Facing Issues Facing Dairy Producers Stan Bevers, Using QuickBooks for Livestock Accounting and Financial Analysis Break Dale Nordquist, Integrating QuickBooks into FINPACK Shannon Neibergs, Risk Management Issues Facing Beef Cattle Production Jeff Tranel, Pasture Range Forage Insurance Tools for Managing Drought

Introductions

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Questions

Questions/comments are invited during the presentation