PROBABILITY OF RECEIVING AN INDEMNITY PAYMENT FROM FEEDER CATTLE LIVESTOCK RISK PROTECTION INSURANCE

Meagan G. Merritt, Andrew P. Griffith, Christopher Boyer and Karen E. Lewis
Authors registered in the RePEc Author Service: Karen Lewis DeLong

Journal of Agricultural and Applied Economics, 2017, vol. 49, issue 3, 363-381

Abstract: Livestock risk protection (LRP) insurance is a price risk management tool available to cattle producers; however, producers have been hesitant to adopt LRP. The objective of the study was to determine the monthly feeder cattle LRP contract coverage level and length maximizing the probability of the LRP net price being greater than the CME Feeder Cattle Index (CME FCI) price. The CME FCI prices were higher than the LRP net price for the majority of the contract lengths and coverage levels. Several coverage lengths and levels provided similar price protection, and there was no consistent preferred coverage length and level.

Date: 2017
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Journal Article: Probability of Receiving an Indemnity Payment from Feeder Cattle Livestock Risk Protection Insurance (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:cup:jagaec:v:49:y:2017:i:03:p:363-381_00

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