Livestock Risk Protection (LRP)

What is LRP Insurance?

LRP provides cattle producers protection from declining national cattle market indexes, giving 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%, often making it 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're 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

Type of Cattle

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

Feeder Cattle Weight 1: < 600 lbs end weight

Price Adjustments:

• Steers = 110%
• Heifers = 100%
• Brahman = 100%
• Dairy = 50%

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

Price Adjustments:

• Steers = 100%
• Heifers = 90%
• Brahman = 90%
• Dairy = 50%

Unborn Steers or Heifers

Price Adjustments = 105%

Coverage Level

• 70–89% = 45–55% subsidy
• 90–94% = 40% subsidy
• 95–100% = 35% subsidy

Endorsement Length

• 13–52 Weeks

Number of Head

• 1–12,000 head/endorsement
• Up to 25,000 head/year

LRP Timeline

• Fill out an application at any point during the year: An application must be filled out to establish eligibility.
• On most days the Chicago Mercantile Exchange (CME) board is open: An SCE can be submitted to establish coverage for livestock between 3:30 PM MST and 7:25 AM MST the next morning.‍Please Note: LRP sales will NOT be available on Cattle on Feed report Fridays starting July 1, 2024*
• Ongoing: Keep records to prove ownership of cattle covered under a SCE.

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

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