Livestock Risk Protection (LRP)

Overview & Key Points

• Provides protection against declining livestock futures prices

• Works like a PUT option

  • Covers downside risk while still being able to benefit from upside moves

• At the end of the insurance period, if the actual ending value is below the coverage price, producers will be paid a loss for the difference.

• Coverage should be aligned with when livestock are expected to be sold

• Can provide coverage for fed cattle, feeder cattle, and swine

Loss Payments

• Coverage prices and ending values are based on the CME Index Value

• Coverage Price - Actual Ending Value = Loss in price

• Loss in price x # of head insured x target weight = Loss Payment

  • For example:

    • 100 feeder cattle insured with a target weight of 750 lbs (7.5 cwt)

    • Coverage price: $3.50

    • Actual Ending Value: $3.25

    • $3.50 Coverage price - $3.25 Actual Ending Value = $.25 price loss

    • $.25 price loss x 100 hd x 750 lb target weight = $18,750 loss payment

  • If the actual ending value is higher than the coverage price, there is no loss

Available Coverage Levels and Subsidies

How to sign up and get coverage

• The policy year starts on July 1st.

  • For example, for you to get coverage for the 2027 RY (Reinsurance Year), you have to sign an application by July 1st, 2026.

• If you have never used LRP before, you are allowed to sign an application at any time. You do not have to wait for the next year. 

• Once an application is in, then you can submit Specific Coverage Endorsements (SCE) as desired.

Feel free to use the LRP Quoter tool below or contact us.

Informational Resources:

Links to USDA LRP Factsheets:

Last Updated: 10-9-26

Want to Discuss or have Questions?

• If you would like to discuss, get a quote or have questions, please contact us - call, text or email.