High Plains Livestock Risk Protection (LRP) Insurance Coverage

Much like there is risk involved in crop production, livestock producers also face their own set of risks and challenges such as herd expansion, input volatility, and cyclically lower prices. When it comes to raising livestock, you don’t want to just be “one of the herd.”  Get protection you can count on with Livestock Risk Protection (LRP) insurance.

What is LRP?

Livestock Risk Protection is a federally sponsored program that protects the producer in the event of a decline in the markets. LRP can be purchased for fed cattle, feeder cattle, swine, and lamb. One beneficial provision made earlier this year was adding new feeder cattle and swine types to allow livestock to be insured before birth. Furthermore, this gives producers another avenue when they do not have 40,000 to 50,000 pounds for a future and options.

LRP vs. Futures/Options Chart
LRP provides benefits that Futures and Options do not.
Paige Hrabe, Crop Insurance Agent

Paige Hrabe, Crop Insurance Agent

                  785-259-2898

How Does LRP Benefit Producers?

Just like Crop Insurance, LRP provides many benefits for producers and their operation, including:

  1. Guaranteed Price
    1. No bid/ask spread
  2. Limited basis risk coverage
    1. Any number of head can be covered from one head up to the programs limit
    2. Coverage can be tailored to account for normal mortality
  3. Numerous endorsement period options
    1. Flexibility in allowing unforeseen market conditions
  4. Target weight range
    1. Wider range available than Chicago Mercantile Exchange
  5. LRP is an insurance policy, not a derivative
    1. Can be purchased from your trusted High Plains Farm Credit agent
  6. USDA Subsidy
    1. LRP premium from 20% to 35% based on coverage level
  7. Payment due at the end of insurance period
    1. Revision made this year. A benefit to producers by paying premium after the sale.

Purchasing LRP Insurance

LRP Insurance can be purchased throughout the year. The premium rates, coverage prices, and actual ending values are posted every day on the USDA Risk Management Agency (RMA) website. Coverage can be purchased every market-trading day after the markets close and ends the following day at 9:00 A.M. CST.

As you can see, there are many benefits for producers to have LRP Insurance. If you are interested in purchasing LRP or would like to learn more, please do not hesitate to contact Paige at 785-259-2898. She is your Certified Livestock Insurance Agent that would welcome the opportunity to serve your insurance needs!

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