According to Farm Journal’s 2025 State of the Beef survey, risk management tools are being implemented by nearly half of producers. With 43% using Pasture, Rangeland, Forage Insurance (PRF) and 40% using Livestock Risk Protection (LRP) insurance.
Contract-based methods — such as futures, options and forward contracts — remain far less common. The survey shows producers are more likely to use risk tools that are simpler and more accessible, such as insurance, income diversification and off-farm income, instead of the more complex market-based tools.
Dave Weaber, Terrain senior animal protein analyst, says: “Risk management is crucial for producers, including developing comprehensive business plans, understanding cost structures, and using tools like LRP, futures and options.”
He says risk management for beef producers is far more than just a financial strategy — it’s a holistic approach to business sustainability.
Risk management is about protecting equity while maintaining operational flexibility. Weaber challenges producers to think beyond traditional commodity approaches, focusing on strategic decision-making that preserves long-term profitability.
“Set aside $40 to $70 a head for risk management,” he says. “I don’t care how you do it, if you use LRP futures, options [or a] combination of it — whatever it is.”
Weaber challenges producers to rethink their approach, asking the critical question: “How do I get less long? Every cattle producer is long in the market. How does he get less long and leave opportunity for the upside?”
He summarizes risk management isn’t about eliminating all risk but strategically navigating market uncertainties.
He encourages producers to:
- Remain adaptable
- Continuously educate themselves
- Invest in measurement and management tools
- Prepare for potential market shifts
By adopting a comprehensive, forward-thinking approach to risk management, beef producers can build more resilient, profitable operations that can navigate market challenges while maintaining financial health.
The State of the Beef Industry Report includes input from nearly 500 beef producers. The annual report provides information to help producers when making decisions. You can download the full report here.
For more insights to the report, as well as producer and economist perspectives, watch the State of the Beef Industry Webinar exclusive on FarmJournal.tv. The panel includes Ken Odde along with Matt Perrier, an Angus seedstock producer from Kansas, and Lance Zimmerman, RaboResearch senior beef industry analyst. You won’t want to miss their thoughts on the beef industry today and in the future.
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