Livestock risk protection (LRP) Insurance

What is LRP Insurance?

LRP is a federally-reinsured insurance product that provides cattle producers protection from declining national cattle market indexes. LRP gives producers an alternative method for managing downside price risk on their livestock.

Why Insure? 

All cattle producers face the risk of declining market prices

LRP is Smart: The USDA’s Risk Management Agency (RMA) subsidizes premiums 35-55%, making it often 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.

Why EastCo Group? 

We are cattle producers who are LRP experts

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.

Coverage Decisions

Fed Cattle: 1,000-1,600 lbs finishing weight

Feeder Cattle Weight 1: < 600 lbs end weight

Price Adjustments:
  • Steers = 100%
  • Heifers = 90%
  • Brahman = 90%
  • Dairy = 50%

Feeder Cattle Weight 2: 600-1,000 lbs end weight

Price Adjustments:
  • Steers = 100%
  • Heifers = 90%
  • Brahman = 90%
  • Dairy = 50%

Coverage Level

  • 70-89%  = 50-55% subsidy
  • 90-94%  = 40% subsidy
  • 95-100% = 35% subsidy

Endorsement Length

  • 13-52 Weeks

Number of Head

  • 1 - 12,000 head/endorsement
  • U p to 25,000 head/year

Purchasing

  • Coverage is available by 3:30 PM MST every day that the markets are open, and can be purchased until 7:25 AM MST the following morning.

LRP Timeline

  • Fill out an application (at any point during the year): An application must be filled out to establish eligibility.
  • On days the Chicago Mercantile Exchange (CME) board is open a Specific Coverage Endorsement (SCE) can be submitted to establish coverage for livestock between 3:30 PM MST and 7:25 AM MST the next morning.
  • Ongoing: Keep records to prove ownership of cattle covered under a SCE.
Want to run your own quote? 
Run my own LRP Quote

*Special Note: The RMA can limit or completely shut down LRP availability due to high market volatility or other unforeseen circumstances.

* This is an information document only and results may vary by individual