Growing Beef Newsletter
February 2026, Volume 16, Issue 8
Strong cattle market means it’s time for risk management review
Tim Christensen, ISU Extension farm management specialist
Photo by Lisa Scarbrough.
As the cattle market remains strong, cow–calf producers have seen the value of their herds increase dramatically. With the rise in cow value comes a greater amount of dollars we have at risk. Because we are not seeing any significant rebuilding of the U.S. cattle herd to date, it is likely these values will continue to increase. With rising value comes increased risk. We have all seen how one news story, one social media post, or one disease scare can move the market significantly - whether the information is factual or not. All of this means we have a greater need for risk management in our operations today than ever before.
The strong economic environment we are experiencing right now provides a great opportunity to evaluate our marketing plans and learn what tools are available. Fine-tuning marketing plans and risk‑management strategies during favorable times can prepare us to better withstand future downturns.
The first step in risk management is understanding our operation’s cost of production. How much do you have invested in a calf when you wean it? What does it cost you to keep a cow for a year? Once we fully understand our costs, we can identify what price levels we need to be profitable.
The USDA Risk Management Agency offers a valuable tool called Livestock Risk Protection (LRP). This is a price‑insurance product that allows us to insure our calf crop up to 52 weeks before marketing. Before the calves are even born, we can purchase coverage on “unborn bulls and heifers” and establish a price floor for when those calves are marketed. LRP can provide price protection to help ensure we cover production costs and secure a profitable return for our efforts.
LRP is a subsidized price‑insurance product administered through USDA’s Risk Management Agency. It allows producers to insure the specific class and weight of cattle they plan to market within their chosen timeframe. While it does not insure revenue or death loss, it does provide price protection against a significant market decline. This can be a very valuable tool as the capital investment in our cow herds continues to grow.
To learn more about how LRP may fit your operation, review the USDA fact sheet here, and the Ag Decision Maker file B1‑50 here.
This monthly newsletter is free and provides timely information on topics that matter most to Iowa beef producers. You’re welcome to use information and articles from the newsletter - simply credit Iowa Beef Center.
