Fed Cattle

FED CATTLE  LIVESTOCK RISK PROTECTION (LRP)

The Livestock Risk Protection Plan – Fed Cattle (LRP-Fed Cattle) is designed to protect against declining market prices. LRP FED Cattle covers cattle with a target marketing weight of 1000-1400 lbs. A floor price can be set on the exact number of head you plan to market. No 40,000 lb. requirement.

Application

BENEFITS:

  • No margin calls, brokerage fees, or minimum contract sizes 
  • No upfront cost.
  • Premiums due at the end of your endorsement period.
  • Lock in LIVE Cattle futures price, settle on 5 area feeding region weekly negotiated cash sales report STEERS: LIVE FOB; 35-65% choice weighted avg. price. 
  • Available in months with no LIVE cattle futures contract. 
  • No requirement to sell cattle when endorsement period is over 
  • Locks in floor price against the market and leaves upside open.

  • Head limits are 6,000 per endorsement, and 12,000 per producer per year. 

  • Coverage is based on number of head and projected sale weight. 

  • Endorsement periods range from 13 weeks to 52 weeks. 

  • Subsidies range from 35% to 55%. 

  • Must own livestock to participate in the program. 

  • Coverage can be transferred to new owners upon sale. 

  • Must fill out one time application for the county & state the cattle will be fed in.

  • Must own cattle within 60 days of maturity date to stay qualified for payment on the maturity date.

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LRP VS. PUT OPTION

AVAILABILITY

LRP has no upfront cost, Premium due after maturity date. PUT Premium due upfront. LRP settles on 5 area feeding regions weekly negotiated cash sales, not live cattle futures as with a PUT or HEDGE. 

LRP can lock in floor price on exact number of head to be marketed, no 40,000 lb. requirement. LRP Coverage endorsements can only be submitted when the market is closed from 4PM to 9AM the following Morning. CME PUTS can be bought during market trading hours. 

If the LRP Program is something you wish to have available to protect your operation and bottom line give us a call or email. We send out LRP price reports daily.