LRP INSURANCE
Livestock Risk Protection (LRP) insurance protects against declining market prices (based on the USDA Agricultural Market Service).
LRP insurance is similar to a put option, allowing producers to establish a floor price for protection while leaving upside price potential open. Unlike market contracts and options, LRP does not require a margin account or broker, it is closer to the actual ending value of the livestock and is based on cash market index prices rather than the futures market. This federally sponsored program typically costs less than other options, is often perceived more favorably by lenders, and may provide additional benefits in terms of lending rates or loan availability.
Secures a minimum price look for your marketable animals while leaving the upside price potential open.
Insures your animals with no minimum head limits and large maximum head limits.
Includes flexible coverage levels from 70% to 100% and premiums paid at the end of the endorsement period.
Has year-round availability with numerous coverage periods.
Offers federal subsidies up to 55%, with no brokerage fees or margin calls required.
LRP insurance protects your investment should prices drop before your livestock gets to market while preserving your upside potential.
- Available for swine, fed cattle, feeder cattle and lamb
- Coverage level options ranging from 70-100% of the expected ending market value of animals
- Flexibility of number of head you can insure
- Feeder Cattle – 12,000 head per endorsement/25,000 head annually
- Fed Cattle – 12,000 head per endorsement/25,000 head annually
- Swine – 70,000 head per endorsement/750,000 head annually
- Coverage can be extended to unborn calves, including those operations with multiple entity structures
Recent LRP Insurance Policy Changes
USDA announced improvements to the Livestock Risk Protection (LRP) insurance program to make these policies more usable and affordable for livestock producers. Specifically, the changes made were to:
- Increased head limits:
- Fed Cattle: 12,000 head per endorsement and 25,000 head per crop year
- Feeder Cattle: 12,000 head per endorsement and 25,000 head per crop year
- Swine: 70,000 head per endorsement and 750,000 head per crop year
- Allow an insured to have an LRP and Livestock Gross Margin (LGM) policy; however, an insured may not insure the same class of livestock with the same end month or have the same insured livestock insured under multiple policies.
- Modify the premium offset language to allow an insured the choice to receive indemnities without a reduction to offset premium on any endorsements that have not ended.
- Clarify head limits are tracked by substantial beneficial interest (SBI).
- Extend the termination date from June 30 to August 31.
- Require proof of ownership before indemnity is issued.
- Clarify that livestock must be marketable by the end of the Supplemental Coverage Endorsement (SCE).
- Require insurance companies to pay indemnities within 30 days. Previously, insurance companies had 60 days to pay indemnities following the receipt of the claim form.
- Allow unborn swine coverage for operations with multiply entity structures.
- Modify the endorsement length for swine to a minimum of 30 weeks for unborn swine and a maximum of 30 weeks for all other swine.
Dive deeper into LRP insurance
Buying a Policy
The LRP insurance program’s coverage prices, rates, actual ending values and per hundredweight cost of insurance may be viewed on the RMA website here. The actual ending values are based on price series data from the USDA Agricultural Marketing Service (swine), weighted prices from the Chicago Mercantile Exchange Group Feeder Cattle Index (feeder cattle) or weighted prices from USDA Agricultural Marketing Service (fed cattle). Actual ending values are posted on the RMA’s website at the end of the insurance period.
LRP insurance sales are typically offered every market trading day. These begin in the afternoon, shortly after the market closes, and run until exactly 8:25 a.m. CST the following morning.
LRP insurance can be purchased through a ProAg-certified livestock insurance agent. An application can be filled out at any time. However, insurance does not attach until the farmer buys a specific coverage endorsement. The farmer may buy multiple specific coverage endorsements with one application. Insurance coverage starts the day the farmer buys a specific coverage endorsement and RMA approves the purchase.
The premium is billed by the premium billing date; the first day of the month following the end date for the specific coverage endorsement and is listed in the Actuarial Documents.
Pro Ag Management, Inc.* (collectively with its corporate affiliates, “ProAg®”) is a managing general agency representing several risk bearing insurance companies, including Producers Agriculture Insurance Company and U.S. Specialty Insurance Company and doing business as Pro Ag Insurance Services, Inc. in California, CA Entity License #0F34212. The insurance products described on this website may not be a complete list of all products offered and may not be offered in all states. The provided information does not amend, or otherwise affect, the terms and conditions of any insurance policy issued by ProAg or any of its subsidiaries; always refer to the policy provisions. Actual coverages will vary based on the terms and conditions of the policy issued.
"*" indicates required fields
