LRP insurance: a covered floor on your cattle price.

Livestock Risk Protection is a federally reinsured program that sets a covered floor on cattle prices. The premium is partially subsidized by USDA. There is no brokerage account to open and no margin to manage. If CME-settled prices fall below your floor by the end of the endorsement, USDA pays the difference.

Coverage window closes June 30.

If you plan to market cattle this summer or fall, the time to lock coverage is now.

Your livestock are your livelihood. And through a Livestock Risk Protection (LRP) insurance policy, we can help you secure protection against declining market prices for your hogs, feeder and fed cattle.

how Coverage is Determined

Initial coverage is set based on the futures market. Typically, the top-strike LRP offering is the same price as the corresponding futures market.
Coverage for feeder cattle settles against the CME Feeder Cattle Index.
Coverage for fed cattle settles against the 5-state area cash weekly value for 80% choice category.

Buying a Policy

You can sign up for LRP most days at 3 p.m. once prices have been set, but your signup must be completed no later than 8:25 a.m. CST the following day. Your premium will be billed two months after your coverage expires.

Your Choices

Number of head to insure
Length of coverage
Coverage level — We typically use a level of 98 - 100%
Target weight when coverage ends — This does not have to be an exact number rather a realistic expectation.

Additional Selections

For feeder cattle, you must pick an accurate number of steers and heifers (except for unborn).
Fed cattle includes steers and heifers valued at the same level.
Fed cattle weight range must be between 1,000 - 1,600 pounds
Feeder cattle have different categories, and each category uses a set factor to adjust price and premium. For example:

	Steers	Heifers	Unborn Calves
100-599 lbs.	110%	100%	105%
600-1,000 lbs.	100%	90%

Requirements

Delivery — Feeder cattle have no delivery requirements. Fed cattle do require sales records.
Selling — Cattle must be retained to at least 60 days before the LRP end date. Fed cattle must be sold within 60 days after the LRP end date. Feeder cattle do not have to be sold.

Advantages

Costs 25 - 30% less than put options
No margin requirements
You don't have to pay premium until later
Feeder cattle LRP settles against the feeder cattle index.

Get an LRP review for your operation

Send us a head count and the window you plan to sell in. We will run coverage scenarios and quote what it costs before you commit to anything.

Request an LRP Quote