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Livestock Risk Protection

Protect your livestock revenue by locking in a "floor price" on futures

or simply protect against catastrophic price declines.

Livestock Report | RMA (usda.gov)

LRP Overview

  • LRP has only one peril. That is a decline in future market value of cattle or swine.

  • There is a one-time application that needs to be obtained at least a day prior to securing any coverage. 

  • Sales periods are Monday through Friday 4pm to 8am.​​

  • Policy periods available are in week time frames: 13, 17, 21, 26, 30, 34, 39, 43, 47, 52

  • You should pick the time period that correlates the closest to when you will market your livestock.

  • The day you take out coverage on your livestock is your Effective Date, then 13-52 weeks after that day is your End Date.

  • Beginning Farmer Rancher and Veteran Farmer Rancher qualifies for additional subsidies.

  • You or your entity must be conservation compliant with the FSA office.

  • Livestock must be owned at the time insurance attaches.

  • Ownership must be maintained up to 60 days prior to the end date.

  • Must be able to verify ownership and sales in order to be qualified for an indemnity.

LRP Feeder Cattle

Types of Feeder Cattle Available (with price adjustment factor):

Steers 

  • Weight 1 (110%)= 1.0 - 5.99 cwt (for steers and bulls)

  • Weight 2 (100%)= 6.0 - 10.0 cwt (steers only)

  • Unborn Steers (105%)- not born yet on the effective date but expected to be marketed by the end date.

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Heifers 

  • Weight 1 (100%)= 1.0 - 5.99 cwt 

  • Weight 2 (90%)= 6.0 - 10.0 cwt 

  • Unborn Heifers (105%)- not born yet on the effective date but expected to be marketed by the end date.

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Predominantly Brahman 

  • Weight 1 (100%)= 1.0 - 5.99 cwt (for heifers, steers and bulls)

  • Weight 2 (90%)= 6.0 - 10.0 cwt (heifers and steers)

  • Unborn Brahman (100%)- not born yet on the effective date but expected to be marketed by the end date.

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Predominantly Dairy 

  • Weight 1 (50%)= 1.0 - 5.99 cwt (for heifers, steers and bulls)

  • Weight 2 (50%)= 6.0 - 10.0 cwt (heifers and steers)

  • Unborn Dairy (50%)- not born yet on the effective date but expected to be marketed by the end date.

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Price Adjustment Factor is designed to account for the differences between steer prices and prices of other types and weights of cattle. They are applied to expected ending values, coverage prices and actual ending values prior to publishing.

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Coverage Price

Feeder Cattle insurance coverage prices and rates are based on the CME Feeder Cattle Contract, which is cash settled to the CME Feeder Cattle Index.

When you establish insurance on your feeder cattle you have chosen a % of a settled futures price for that day.  This price will be used to determine if you have an indemnity on the end date. The end date price is the CME Feeder Cattle Index price for that day, which is a seven-day average.

Limits

Limit of # of feeder cattle per endorsement= 12,000 head

Annual limit on feeder cattle= 25,000 head

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To see the current insurance prices, click on the link at the top of the page- LIVESTOCK REPORT and navigate through the drop-down boxes to get the class of cattle that fit your needs.

Feeder Cattle Index price link- Commodity Index Prices - CME Group

LRP Fed Cattle

Fed Cattle are those weighing 1000+ pounds. The Fed Cattle coverage has the same rules as those listed above in the overview and the same number of limits on the number of head that can be covered.

The end date price, or the actual ending value is the price of the live commodity as calculated by the Agricultural Marketing Service for the live Basis Sales, Steers Over 80% Choice category. Type in "5 Area Weekly Weighted Average Direct Slaughter Cattle" in your search engine to get the current price.

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