Livestock Risk Protection (LRP)
You’ve put in the time, feed, and labor on your livestock. Don’t let a falling market take a bite out of your profits. USDA-backed Livestock Risk Protection insurance allows producers like you to lock in future prices and safeguard revenue before your animals hit the sale barn. It’s simple, flexible, and designed to keep your operation financially steady when the market isn’t.
Talk to an Allied Ranchers Insurance agent to learn more about LRP insurance.
What Livestock Risk Protection Insurance Offers
Livestock Risk Protection insurance offers straightforward coverage tailored to the real risks livestock producers face—volatile market prices. It’s designed to provide peace of mind by guaranteeing a floor price, helping you manage revenue more effectively, no matter what the market throws your way.
Protects Your Revenue from Sudden Market Drops
Livestock Risk Protection insurance helps secure your income when livestock prices fall, preventing a decline in their prices from eating into your hard-earned profits at sale time.
Scales to Fit Small Farms and Large Ranches Alike
Whether you run a small family ranch or manage thousands of heads, LRP insurance offers scalable coverage with no minimum herd size, making it ideal for operations of any scale.
Daily USDA-Backed Market Updates
Lock-in price protection based on up-to-date USDA market data. LRP pricing updates every business day, giving you the flexibility to choose a coverage price when market conditions are most favorable.
Affordable Premiums
With USDA premium subsidies covering 20% to 55% of the cost, Livestock Risk Protection is one of the most cost-effective risk management tools available for managing losses incurred from market price changes.
Simple and Direct Protection
This livestock insurance policy is designed to be easy to understand. You select your coverage, pay a subsidized premium, and if market prices drop below your set level, you receive a clear indemnity payment.
How Livestock Risk Protection Insurance Works
Livestock Risk Protection (LRP) insurance is a USDA-backed program that helps producers safeguard their expected income by setting a minimum price for livestock sales. It’s a flexible, affordable way to manage price risk – without the complexity of trading futures.
Here’s how LRP insurance works, step by step:
Choose Your Coverage
Work with one of our licensed crop insurance agents to select a Specific Coverage Endorsement (SCE) based on:
- The number and type of livestock (feeder cattle or fed cattle)
- Your target weight at the end of the coverage period
- Your desired coverage price (typically 70–100% of the expected market price)
- A coverage period between 13 and 52 weeks
Pay Your Premium
Your premium payment is partially subsidized by the USDA (20–55%), making the policy accessible for most producers. The cost will vary based on your selected price level, coverage period, and market volatility.
The USDA Monitors the Market
Throughout your coverage period, USDA tracks livestock market data (e.g., futures from the Chicago Mercantile Exchange or USDA AMS reports). You don’t need to report your sale price—just focus on your operation.
Get Paid if the Market Drops
If the final market value is below your coverage price, you’ll receive an indemnity payment. It’s calculated using the insured weight and number of heads, covering the shortfall caused by a decline in prices.
What LRP Insurance Covers
Livestock Risk Protection insurance is built for one purpose: protecting your revenue when market prices drop. It doesn’t cover physical losses like illness, death, or natural disasters, and it doesn’t guarantee a specific sale price for your animals.
Instead, LRP pays insured livestock producers when the national market index (based on USDA or CME futures market data) falls below the price level you selected at the start of your coverage period. That means you get a payout to help recover lost income, even if livestock market prices decline.
Covered Livestock Types
Livestock Risk Protection insurance covers the most commonly marketed animals in U.S. livestock operations. Each category is clearly defined to match USDA standards, making coverage easy to apply.
Feeder Cattle
Lightweight calves, steers, or heifers not yet at slaughter weight (typically under 1,000 lbs)
Fed Cattle
Finished cattle are ready to be sold for beef
Who’s Eligible for LRP Insurance?
Livestock Risk Protection insurance is for producers who want to safeguard their bottom line. If you raise livestock for market and have a financial stake in your herd, you likely qualify.
You’re eligible if you:
- Own or share in the livestock you’re insuring (this includes individual producers, partnerships, corporations, and other legal entities)
- Operate within one of the 50 states of the U.S.
- Meet USDA guidelines for insurable livestock types, weights, and ages.
- Apply through a licensed crop insurance agent, like Allied Ranchers Insurance, who will help you purchase your coverage and keep you compliant.
Ready to Take Control of Your Revenue?
You shouldn’t lose sleep over unpredictable market conditions. The Livestock Risk Protection insurance program gives you a financial backstop, ensuring you don’t incur losses when market volatility goes against you.
Get in touch with Allied Ranchers Insurance for a quote or personalized guidance from LRP insurance agents who understand your business.
Frequently Asked Questions
LRP is a USDA-subsidized insurance program that protects livestock producers against unexpected declines in market prices for their animals. It ensures a minimum revenue at the end of the coverage period. But, it does not cover physical losses like death or theft.
Producers with a financial interest in eligible livestock and operating in one of the 50 U.S. states. This includes individual farmers, partnerships, or corporations. There’s no minimum herd size, making it accessible to both small and large producers.
The LRP insurance program covers:
- Feeder Cattle: Calves, steers, or heifers under 1,000 lbs.
- Fed Cattle: Cattle ready for slaughter.
- Swine: Market hogs.
Breeding stock or other livestock types are not covered.
Producers purchase a Specific Coverage Endorsement (SCE) through a licensed crop insurance agent, selecting the number of head, coverage price (70-100% of expected market price), and coverage period (13-52 weeks). If the actual market price (based on RMA’s price indices) at the end of the period is below the coverage price, the producer receives an indemnity payment to offset the loss.
Indemnities are calculated as:
(Coverage Price – Actual Ending Value) × Target Weight × Number of Head
For example, if a producer insures 100 head of feeder cattle at $150/cwt (hundredweight) with a target weight of 7 cwt, and the actual ending value is $130/cwt, the indemnity is ($150 – $130) × 7 × 100 = $14,000, minus the premium cost.
Yes. Since LRP is a federally subsidized risk-management program, the USDA takes care of 20-55% of the premium payments. The coverage depends on the coverage level chosen, with higher coverage levels having lower subsidies. This makes LRP more affordable than other risk management options like futures contracts.
Coverage periods range from 13 to 52 weeks, depending on the livestock type and the producer’s marketing plan. Producers choose a period that aligns with when they expect to sell their livestock.
No, LRP only covers price risk based on market price declines. It does not cover physical losses due to death, theft, disease, or weather. Producers seeking coverage for physical losses should consider other insurance products.
The RMA uses standardized price indices, such as Chicago Mercantile Exchange (CME) futures or USDA Agricultural Marketing Service data, to determine the “actual ending value” for each livestock type. This may differ from the producer’s actual sale price.
Yes, LRP can be used alongside other tools that manage the risk in livestock operations, like futures contracts or forward contracts, but producers must report the different policies they to avoid over-insurance or duplication of benefits.
LRP coverage is offered daily, with prices and rates updated by the RMA. Producers can purchase Specific Coverage Endorsements (SCEs) as needed, based on their production and marketing schedules, subject to RMA approval and availability.
Producers pay a premium (partially subsidized by the USDA) and may incur a small administrative fee. The premium varies based on the number of heads, coverage level, and market volatility.
Contact us here at Allied Ranchers Insurance to get started with your application. One of our authorized insurance agents can also help you choose the right options to tailor a policy that suits your needs.
If the actual ending value is above the coverage price, no indemnity is paid, but producers benefit by selling their livestock at the higher market price. The only cost is the premium paid for the coverage.
LRP is available in all U.S. states, but coverage for specific livestock types or regions depends on RMA approval and market data availability. Contact our insurance agents here at Allied Ranchers Insurance for state-specific details.
