Additional LRP Products to Benefit You
As a dairy farmer or livestock producer, you know how rapidly changing market prices can impact your farm and your livelihood. Livestock Risk Protection, or LRP, is a risk-management tool used by producers to insure the futures prices of their swine, dairy, or beef cattle from declining markets.
Producers now have the ability to insure higher values for their cull cows and day-old calves due to lowered weight requirements for LRP coverage set in place by the USDA. Learn more about how these additional LRP products can benefit you and your farm!
How Does Livestock Risk Protection Work?
LRP is a revenue-based program that insures the prices of swine, dairy, and beef cattle against a decrease in market revenue. It protects up to 100% of the future values of an operation’s livestock, not the loss, death, or destruction of livestock.
Unlike conventional crop insurance, LRP is sold every weekday, based on market future prices. When the market closes at 3 p.m. Eastern Standard Time each day, those future prices are what are offered to you, the producer, with coverage levels ranging from 70% - 100%.
Coverage can be placed on your livestock anywhere from 13 to 52 weeks out. Producers can insure cattle and dairy cows based on live weight, while swine is based on lean weight.
LRP can also be combined with your Livestock Gross Margin policy to provide a more comprehensive risk management strategy.
Additional LRP Products Now Available
Due to beef cattle prices and non-milk prices on dairy farms reaching an all-time high, the USDA has introduced two new options for insuring your cattle through LRP. These additional products allow producers to reduce their risk to market movement and insure the value of their livestock.
Cull Cows
LRP for cull cows can be booked under a feeder cattle Specific Coverage Endorsement, or SCE, and settles against the feeder cattle index. This is because historically cull cows have a better price fit with feeder cattle in addition to having closer seasonal price movements.
Producers looking for coverage on their cull cows must market them within a 60-day window of the end date, and they must have a weight limit between 800 and 1,500 pounds.
Unborn Calves
LRP for unborn calves is intended to cover the increased value of any beef on dairy cross calves that will be sold between 60 and 99 pounds. This coverage option protects producers against declining market prices for day-old calves that are intended for beef.
Similarly to how LRP is now available for cull cows, day-old beef calf pricing is also booked under the feeder cattle SCE and is priced off the feeder cattle index. The Unborn Calves SCE is booked as a feeder cattle endorsement and settles against the Feeder Cattle Index. It uses a seasonal price adjustment factor to reflect seasonality and differences in cash dairy beef and cross calf prices compared to the Chicago Mercantile Exchange feeder cattle index.
Producers looking for coverage on their day-old calves have a 30-day window to market them and will need to provide a sales record.
How Do These Additional Products Benefit Me?
LRP coverage is customizable for all styles of operations. With rapidly fluctuating markets, it’s more important than ever to secure coverage to protect your livestock, your farm, and your livelihood.
GreenStone also offers an exclusive livestock analyzer tool through our app or the website. This tool allows producers to view quotes, request coverage, track endorsements, and access the latest market information to always stay informed.
Our dedicated team of livestock crop insurance specialists are here to answer any questions you might have on how LRP or other livestock insurance options can help benefit your farm. Contact your local branch to learn more!
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