Securing the Future: Why Risk Management Matters
On the rolling prairie near St. Anthony, North Dakota, Chad and Julie Ellingson built their lives around a family-run registered Angus ranch. With five children, a daughter-in-law, a son-in-law, and now grandchildren growing up on the operation, Ellingson Angus is more than a cattle business — it’s a legacy.
“It’s our mission to not screw it up for them,” Chad says with a smile, recalling how he opens their annual bull sale. “We want the future for them, and for our grandchildren.”
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That commitment to the next generation is why Ellingson joined the Common Ground Coalition, a united front of leaders from across the cattle industry. Around the virtual table are cow-calf producers, seedstock operators, feeders and packers — people with different perspectives, but a shared concern: ensuring the cattle industry survives.
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One of the issues weighing heavily on Ellingson’s mind is risk management.
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“Compared to 10 years ago, we’re dealing with a lot more money today,” he says. “We need to ensure that we have some risk protection.”
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LRP, or Livestock Risk Protection, is one form of risk management at the forefront of the Common Ground Coalition’s efforts. Like other government subsidized insurance programs, LRP is designed to help producers guard against unexpected swings in market prices.
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Ellingson says the program has already improved since the coalition’s inception:
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Increased subsidy levels. Rates now range from 35% to 55%, depending on coverage level and livestock type. Increased premium subsidies make risk protection more accessible to a broader range of producers, especially smaller operations.
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Coverage starting when price risk is assumed. Forward contract coverage is now allowed, meaning producers can insure price risk on livestock before they physically possess them. This closes critical timing gaps in protection.
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New coverage options. Additions like unborn calf coverage, cull dairy cow coverage and drought-based hardship exemptions show the program is expanding to meet real, on-the-ground needs.
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Improved industry input and oversight. Many of the recent updates were driven by producer feedback and reflect a more responsive and collaborative approach between USDA’s Risk Management Agency and the livestock industry.
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Of course, there’s still work to be done.
Mike VanMaanen, an auction market owner, cattle producer and president of Livestock Marketing Association, says continued work with Risk Management Agency and key stakeholders could create a pipeline for real-time producer feedback to continue tailoring the program to the needs of users.
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“This is a critical area where industry consensus can translate into action in Washington, D.C., that will benefit the long-term financial health of livestock operations,” he says, emphasizing that the coalition is designed to create the kind of united front Congress needs to see.
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“Agriculture is a minority voice, and in D.C., if Congress hears different things from different livestock groups, the easiest thing for them to do is nothing,” VanMaanen says. “But when we align, we have champions ready to help us make progress.”