LRP provides cattle producers protection from declining national cattle market indexes, giving producers an alternative method for managing downside price risk on their livestock.
LRP is Smart: The USDA’s Risk Management Agency (RMA) subsidizes premiums 35–55%, often making it more affordable than other risk management hedging tools. Also, LRP coverage still allows producers to capture market moves to the upside.
LRP is Simple: Record keeping is minimal and indemnity is determined by cash indexes, not an adjuster. After completing an application and submitting a Specific Coverage Endorsement (SCE), only ownership documentation of the number of cattle covered during the insurance period is required. LRP policyholders have no futures market exposure and are not subject to margin calls.
We use LRP ourselves: We understand the importance of protecting your livestock against declining markets in all sectors of the cattle industry from cow-calf to finishing at the feedyard. We have experience using futures and options, and understand when and why it is optimal to use LRP as part of your risk management plan. We can help maximize risk management and basis value for your operation.
Fed Cattle: 1,000–1,600 lbs finishing weight
Feeder Cattle Weight 1: < 600 lbs end weight
Feeder Cattle Weight 2: 600–1,000 lbs end weight
Unborn Steers or Heifers
Special Note: The RMA can limit or completely shut down LRP availability due to high market volatility or other unforeseen circumstances.