Livestock / Dairy Risk Protection

Livestock producers have seen great fluctuation in the market over their lifetime.  That has never been truer than in the last year and a half with the uncertainty surrounding COVID-19.  The ups and downs experienced in the last year and a half have many producers wondering how to protect themselves in a market downfall.  One way to do this is through the purchase of Livestock Risk Protection Insurance (LRP) or Dairy Revenue Protection (DRP).

LRP and DRP are insurance products that protect producers from unexpected declines in price.  It can be purchased on Fed Cattle, Feeder Cattle, Swine, and dairy milk.  They are affordable ways for producers to protect their bottom lines in the event of a market decline.

LRP and DRP insurance is available to anyone who has ownership in the livestock or milk.  You must also be registered as conservation compliant with your USDA office by completing the AD-1026 form.

Applying for LRP/DRP and Purchasing Coverage Endorsements

To begin the process, a producer must fill out an application with a licensed agent to be submitted to an insurance company and approved for eligibility.  Once an insured’s application is approved, the application is continuous until cancelled by the insured or insurance company. 

Once your application is submitted and approved, an insured then purchases a Specific Coverage Endorsement (SCE) for LRP or Quarterly Coverage Endorsement (QCE) for DRP.  These endorsements to a policy are what provide coverage for the period requested by the producer.  For LRP these endorsements can range from 13 to 52 weeks. DRP endorsements are offered on a milk category or component pricing basis.  Endorsement offerings for LRP and DRP are offered daily.

Endorsements are subject to limitations.  For cattle, you are limited to 6000 head per endorsement, and 12,000 head annually.  For swine, you are limited to 40,000 head per endorsement and 150,000 annually.   

Coverage is determined by selecting a coverage level (70-100% for LRP and up to 95% for DRP) of the expected ending price.  Endorsements must be submitted and completed by 9:00 am the following business day, including Saturdays.  Only DRP endorsement purchases are allowed on Sundays.  No endorsement purchases are available on Mondays.  Premiums for all products are due at the end of your coverage period.