To prevent losing money on their livestock when the market takes a turn for the worst, producers may want to think about livestock risk protection insurance.
That topic will be discussed at the Ag Day luncheon set to be held at the Elks Club Thursday.
"It's price protection that is very similar to hedging," said Dan Beyer, vice president of financial services for Farm Credit Services, featured speaker for the event. "The big difference with this product is that it's very customizable. Producers can customize it to their size of operation."
The insurance is part of a federal program, he added, and has been available since about 2005.
Beyer said the insurance is available for up to 2,000 head of cattle. Pigs and sheep are part of the program as well.
"What's neat is, a small producer with 100 cow-calf operation, he could use this to lock in a price on his cattle," Beyer said. "A guy with a 500 cow-calf operation can do it too. You can customize it to a large degree."
Insurance of this type provides an assurance that the producer will break even on his cattle.
"That's what I ask them to look at," Beyer said. "What will break them even."
Contracts for the insurance varies anywhere to 26 weeks up to 52 weeks, Beyer said and is available everyday.
Prices for the insurance are based on futures markets, Beyer said.
"I would say a dollar a pound on a 600-pound steer is probably breaking about even right now," Beyer said. "For a lot of producers may not be too bad."
To receive the insurance, Beyer said producers must visit a crop insurance agent and fill out an application.
Producers should check and see if their agent is licensed to sell livestock risk protection insurance, Beyer said.
"Once the producer fills out an application they kind of just wait for the day they want to lock in some cattle," Beyer said. "They could pick 10 head today for example and 10 head tomorrow to spread their risk out even further."
The application process is all done online, he added.
Kevin Holten, a member of the Chamber of Commerce's Agriculture Commitee, said the luncheon also gives producers a chance to discuss what's going on their operations.
"The event is in celebration of National Ag Day," Holten said. "It's really an opportunity to gather together people that are involved in agriculture in the region."
To make a reservation for the Ag Day luncheon or for more information, call 701-225-5115.
The event is sponsored by the Agricultural Committee of the Dickinson Area Chamber of Commerce.