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Understanding USDA’s Livestock Risk Protection Insurance Program for Feeder Cattle

Kenneth Burdine and, Greg Halich (July, 2008)

Summary

Since the summer of 2007, the Livestock Risk Protection (LRP) Insurance program has been available to Kentucky cattle producers. Due to recent volatility in the cattle market, interest in price risk protection has increased. Traditionally, livestock producers have used either forward contracts or futures/options trading to manage this price risk. LRP insurance provides another option that producers can now use to do this. The purpose of this publication is to familiarize the reader with how the LRP insurance program works and compare it with other feeder cattle price risk management options. A case example is included to show how this insurance program works in a real-life situation.