Livestock Risk Protection (LRP) is a federally subsidized risk management program which protects against market price decline—without sacrificing upside potential—within a predetermined period. LRP is available on a per head basis for fed cattle, feeder cattle, and/or swine using area pricing to determine indemnities.
The producer selects an end-date for the endorsement that is closest to the expected marketing date (delivery date, slaughter date, or timing of desired weight) for the livestock. Producers then choose from a variety of coverage levels and insurance periods. LRP insurance pays an indemnity if the actual ending value at the end of insurance falls below the insured coverage price at the time of purchase.
LRP does not cover death loss, theft, or any other loss or damage. The insured must notify their crop insurance agent of death of livestock within 72 hours of discovery. If you dispose of or sell your covered livestock more than 60 days prior to the specific coverage endorsement (SCE) end date, you will not be considered to have ownership interest in the livestock.
Farm Credit customers with a signed LRP insurance application and user agreement have access to our industry leading LRP Analyzer. The LRP Analyzer provides daily premium rates and coverage prices to help you make informed LRP purchases. Customers also have access to put/option comparisons, historical performance, market dynamics, endorsement tracking, daily quoting, and daily or weekly emails. Contact your local crop insurance consultant for a demo or to gain access.
Coverage is available year-round. Insurance period availability is based on options trading on the Chicago Mercantile Exchange (CME). Prices are available from approximately 3:30 p.m. CT until 8:25 a.m. CT the following day.
Coverage levels are available between 75 and 100% of expected prices in 5% increments. A 35% to 55% federal subsidy is determined by the coverage level.
| COVERAGE LEVEL | SUBSIDY FACTOR |
|---|---|
| 95%-100% | 35% |
| 90%-94.99% | 40% |
| 85%-89.99% | 45% |
| 80%-84.99% | 50% |
| 75%-79.99% | 55% |
