Question 1

How does LRP insurance differ from other forms of livestock insurance?

Accepted Answer

Livestock Risk Protection insurance is different from other forms of livestock insurance as it's a government subsidized product to cover strictly against a decline in price.  LRP does not cover death loss or production issues as some other insurances may.  Livestock Gross Margin (LGM) is another government subsidized insurance but exists to cover the livestock "crush."

Question 2

How does LRP help mitigate financial losses in both cattle and hog production?

Accepted Answer

Livestock Risk Protection insurance helps to mitigate financial losses in cattle and hog production by providing a marketing "floor" for their prices.  Producers pick a coverage price that works for their operation after consulting with their LRP agent.  If the settlement price drops below their coverage price, they will be redeemed back to their purchased coverage price.

Question 3

What specific risks does LRP cover for cattle and hog producers?

Accepted Answer

Livestock Risk Protection insurance specifically covers the risk of a drop in hog or cattle prices.  Once a coverage price is chosen, LRP will protect a market decline below the coverage price.

Question 4

What factors should I consider when determining the appropriate coverage level for my livestock?

Accepted Answer

Before purchasing Livestock Risk Protection insurance, it's best to consulate with an agent here at Logic Ag Marketing. Ten different coverage levels exist for each time frame and have varying levels of subsidy. There are several factors to consider when selecting a coverage level for your livestock which include but aren't limited to: basis risk, seasonal cash market trends, local cash market strength, cost of placed cattle, and feed costs.

Question 5

How does LRP payout work if a loss occurs in my livestock operation?

Accepted Answer

An indemnity is trigged when the settlement price falls below the LRP coverage price.  Logic Ag Marketing's team guides you through the process and is in communication much in advance of a potential claim.  The insured will need to provide proof of ownership and sign a notice of loss to complete the claim.  Our team insures they're beside you each step of the way to expedite the claim process.

Question 6

Can LRP be integrated with other risk management strategies for comprehensive coverage?

Accepted Answer

The beauty of Livestock Risk Protection insurance is that it can be a nice addition to your existing risk management plan.  LRP works well in conjunction with packer contracts, futures sales, and various options strategies.  Once purchased, LRP  gives you the flexibility to delay making a final marketing decision as you have the peace of mind of being protected by LRP.

Question 7

What is the difference between LRP and LGM insurance?

Accepted Answer

Both Livestock Risk Protection insurance and Livestock Gross Margin insurance are government subsidized products intended to protect a producers market risk.  LGM insurance takes into consideration many more factors such as animal input cost, feed cost, and expected sales price and provides protection on the anticipated margin.  LRP insurance only protects against a decline in price.  Agents at Logic Ag Marketing are dually licensed and often check to ensure the viability of one product verse another.

LEARN MORE

Need a deeper understanding of what we do? Find answers to frequently asked questions and engage with our informative Q&A section below or head over to our LRP quoter to see how LRP can protect your operation.

FREQUENTLY ASKED QUESTIONS