Have you heard of Livestock Risk Protection, or LRP? Like the term suggests, LRP protects your livestock. Furthermore, it is a federally sponsored program that protects the producer in the event of a decline in the markets. In this article, you’ll learn why producers should seriously consider LRP and how it can help your operation.

The Time Is Now

It’s that time of year for the cow-calf producers and the cattle buyers! Spring calves are being weaned and taken to a local sale barn or a backgrounding yard. As a producer, deciding what the best route to increase your dollar is a high priority. With Livestock Risk Protection (LRP), we can help protect the cow-calf producer who would like to hang on to their calves and feed until they hit a target weight that will help increase their profit margin. LRP is also beneficial to a cattle buyer that buys the weaned calves either from the sale barn or directly from the producer. LRP protects against fluctuation within the cattle market. Markets are based on the Chicago Mercantile Exchange. It is an insurance policy that can have 1 head to 12,000 head per crop year, and can be purchased at any time throughout the year. As you can see from the image below, it also provides benefits that Futures and Options do not.

Paige Hrabe, Crop Insurance Agent
Paige Hrabe, Crop Insurance Agent
LRP vs. Futures/Options Chart

Livestock Risk Protection and Unborn Calves

Did you know you can use LRP for unborn calves? Unborn cattle are livestock not born on the effective date but expected to be marketed before the end date. Livestock are required to be born prior to the end date. The endorsement length is anywhere from 13 weeks to 43 weeks. For unborn cattle, RMA has a 50/50 mix of steers and heifers. They use an average price of coverage available for steers weight 1 and heifers weight 1.

LRP pays producers if regional and national cash price index fall below the floor price that has been selected. Large cattle price declines have occurred due to industry disease outbreaks, drought, industry disruptions and human disease pandemics. Livestock risk protection does not protect against mortality, condemnation, physical damage or disease.

What Has Changed?

Although LRP insurance has remained relatively unchanged since its inception in 2002, several enhancements and improvements have taken place over the last year and a half. To learn more about these changes, be sure and read this informative article.

Interested in purchasing LRP Insurance? Contact Paige Hrabe today at 785-259-2898. She is your Certified Livestock Insurance Agent that is ready to serve your insurance needs!