Livestock Insurance: LRP Coverage Options

What is it?

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.

How it Works

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 on the end-date of the endorsement if the regional/national cash price average is below the insured coverage price.

What Does it Not Cover

LRP does not cover death loss, theft, any other loss or damage. The insured must notify crop insurance agent of death of livestock within 72 hours of discovery. The insured must also retain ownership up to 60 days prior to the insurance end date.

LRP Analyzer Tool

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.

Availability and Deadlines

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.

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Coverage Level

Coverage levels are available between 70 and 100% of expected prices in 5% increments. A 35% to 55% federal subsidy is determined by the coverage level.