10 Quick Facts About Livestock Risk Protection (LRP): A Guide for Colorado Farmers

In the ever-evolving world of agriculture, managing risk is paramount to maintaining a profitable agriculture business. Livestock Risk Protection (LRP) is an essential tool for cattle and swine producers seeking to protect their investments from falling commodity prices. Understanding and utilizing Livestock Risk Protection (LRP) can significantly affect the stability and profitability of your local Colorado operation.

Here at Farm Credit of Southern Colorado, we’re committed to providing the resources and support you need to navigate the complexities of agricultural finance and risk management. Specifically, for LRP, let’s dive deeper into some helpful facts that could help support your very own livestock operation. Here are ten fun facts you may not know about LRP and how that insurance product can help local Colorado livestock farmers.

1. Protects Against Falling Market Prices

The LRP protects against market price declines by locking in future prices, providing financial security for your local Colorado livestock operation in uncertain market conditions.

2. Coverage Level

LRP offers a coverage level of 70% to 100% of the expected closing price based on the Chicago Mercantile Exchange Group Feeder Cattle Index, not your local market or the actual selling price of your cattle. This allows you to choose the level of protection that best suits your risk tolerance and financial goals.

3. Easy Application Process

LRP requires only one application to get started. Once your initial application is approved, you can then have several endorsements after that, making the process easier and more efficient.

4. Easy Contract Dates

LRP offers a variety of contract dates to suit your needs. You can choose 13, 17, 21, 26, 30, 34, 39, 43, 47, or 52 weeks, allowing you to tailor the coverage period to your specific program schedule.

5. Mobility of Cattle

After Risk Management Authority (RMA) acceptance, cattle can be moved anywhere from the original endorsement location. This flexibility ensures you can maintain your livestock as needed without affecting your coverage.

6. Multiple Livestock Type Coverage

LRP provides coverage for many weight classes, such as steers, heifers, fed cattle, and unborn calves. This comprehensive coverage ensures that all aspects of your animals are protected, giving you peace of mind.

7. Two Weight Classes

Steers and Heifers have two weight classes: 100-599 pounds and 600-1000 pounds. This allows for coverage based on your specific ending target weight

8. Immediate Coverage

LRP coverage begins the day you purchase a specific coverage endorsement once approved by RMA.

9. Convenient Payments

LRP payments are due at the end of the endorsement and can be deducted from any payable indemnity. This makes managing your cash flow more accessible and ensures you can maintain coverage without immediate out-of-pocket expenses.

10. Proof of Ownership is Required

Proof of ownership is required for indemnities to be paid. This ensures that compensation is paid to the rightful owner, giving you a clear and secure path to benefits.

Understanding and implementing Livestock Risk Protection (LRP) coverage for your Colorado farm can help secure your farm’s future. Our insurance team is here to help you protect your investment and ensure a proactive risk management strategy is implemented within your agriculture business. If you’re a local Colorado livestock farmer and have yet to take advantage of LRP coverage, please call Bobby or Trista today for more information. They’re available to help get you on the right path to success in the livestock industry!