More Cattle Covered Under LRP
Livestock Risk Protection (LRP) has been available to livestock producers for nearly 20 years and is designed to assist cattle and swine producers insure against declining market prices. Prior to 2021, the program was little used by cattle producers. However, changes made by the USDA Risk Management Agency (RMA) have enticed more participation. The changes sought to lower the cost, make the program more usable, and provide greater access. It appears the RMA has succeeded.
Figure 5 shows the number of feeder and fed cattle in Nebraska covered under LRP beginning in 2005. As the figure shows, the number of feeder cattle insured remained low until 2021, the year the changes were implemented, when it surged to over 62,000 head nearly doubling the previous high of over 34,000 in 2011. This year the number soared even higher, exceeding 200,000 head. The same story can be told for fed cattle. The number covered prior to 2021 was minimal. In 2021, it increased to nearly 49,000 head and closed in on 150,000 head this year, well above the levels covered in the previous 16 years.
It appears the changes to LRP have encouraged more cattle producers to participate in the program. This doesn’t mean it is the right choice for every cattle producer. It does suggest, though, that producers should investigate it as a possible risk management tool for their operations.
Figure 5. Nebraska Feeder & Fed Cattle Covered Under LRP
Source: USDA Risk Management Agency, Oct. 20, 2022