Commodity Price Risk and Revenue Insurance for Agriculture
Commodity Price Risk and Revenue Insurance for Agriculture
Farmers are constantly dealing with risk. Whether due to drought impacting crop growth, the spread of disease through livestock herds, global supply chain disruptions and other factors, the agriculture industry is impacted by risk in many ways. Although many of these risks may be outside of farmers’ control, there are tools available to protect their operations and livelihoods from volatility and price risk.
One valuable tool is to purchase commodity price risk insurance. These government-sponsored policies can ease the burden for farms in the event of pricing fluctuations that threaten their profitability and margin management. There are many different types of policy coverage, and it can be daunting for farmers and producers to find the policies that provide the best coverage for their specific needs. CIH Insurance Services offer crucial guidance to find insurance solutions that work alongside or independently from exchange-traded alternatives.
When CIH serves as your risk management partner, you receive the full benefit of our deep experience in commodity price risk insurance. We work closely with you to align your policy selection with your specific pricing and revenue goals, risk tolerance, and tailored hedging strategy.
Why Commodity Price Risk and Revenue Insurance Matters
Price volatility can always impact an operation’s bottom line and how margins are managed. Irregular and severe weather patterns, supply chain interruptions and shifting politics of global demand have historically created pricing environments where USDA sponsored insurance policies offer strategic coverage.
Commodity price risk insurance is one effective way to guard an operation from price volatility because of the coverage types and opportunities to use in tandem with other exchange traded alternatives. Whether establishing a floor on prices or providing offsets to protect your revenue from traditional commodity trading strategies, USDA insurance policies can offer objective strategies that are often overlooked and underutilized. CIH Insurance Services is your partner for revenue and price protection with pig insurance, cattle insurance, diary insurance, and crop insurance to create comprehensive risk management strategies for your farm or operation.
Types of Agricultural Commodity Insurance
CIH Insurance Services has applicable knowledge and practical experience to help you make the right decisions with agricultural commodity insurance:
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Livestock Risk Protection Insurance (LRP)
This type of policy protects you against declining livestock prices for feeder cattle, fed cattle and swine. It provides you with a guaranteed pricing floor without margin requirements or upfront premium like futures and options contracts do. LRP is ideal for cow-calf operators, feedlots and swine producers.
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Livestock Gross Margin Insurance (LGM)
An LGM policy combines livestock commodity price protection with feed cost exposure management. It protects the margins between input costs for feed and livestock prices, making it relevant for hog and cattle producers.
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Dairy Revenue Protection Insurance (DRP)
Choosing a DRP dairy insurance policy provides coverage against milk market price declines for Class III, Class IV and Components on a quarterly basis, making it an important tool for hedging volatile dairy markets.
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Multi Peril Crop Insurance (MPCI)
Multi peril crop insurance covers yield losses from natural causes: excess precipitation, drought, insect damage, plant disease, hail, wind, flooding, frost, wildlife, tornado and fire. Losses can be caused by one or any combination to qualify. It also protects from lower prices.
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Pasture, Rangeland and Forage Insurance (PRF)
With this policy, you can offset risk of forage losses caused by lack of rainfall. It sets coverage based on precipitation levels within grid regions, and provides coverage on pasture, rangeland, and forage acres.
Cattle LRP Insurance →Swine LRP Insurance →
Cattle LGM Insurance →Swine LGM Insurance →
CIH is ready to ensure you take advantage of any coverage opportunities that objectively align with your operation’s goals, risk tolerance, and individual biases. Our teams lead with education, technology, and an objective approach to find insurance opportunities for your operation.
Why Partner with CIH?
Farmers and producers rely on CIH when they need a commodity price risk management partner they can trust. Our deep market experience and analytical insight provide clients with the risk protection stability and confidence needed to make better decisions. We don’t simply suggest a policy— we make sure you understand the opportunities a policy coverage offers, where it can integrate with futures and options strategies, and how cost efficiencies may present themselves through time. Thousands of domestic and international clients throughout the agricultural sector trust CIH because they know they will receive transparent, data-driven solutions for their risk management needs.
If you’re ready to learn more about how CIH and CIH Insurance Services can help you safeguard your operations from uncertainty and risk, reach out and talk to a member of our team today for a free consultation.