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Rachel Hudson and Jessica Hamill, crop insurance agents, on zoom screen.

The Ins and Outs

FCS Financial’s Crop Insurance team members, Jessica Hamill and Rachel Hudson, discuss the ins and outs of livestock risk protection (LRP)  insurance in the video above, answering common questions that producers ask.

What is livestock risk protection (LRP) insurance?

“Livestock Risk Protection is an insurance product that essentially protects producers again a decline in marketing prices,” says Rachel Hudson, Assistant Vice President. “It’s not a death loss policy for livestock producers, but allows them to set a floor or put a price lock in place to protect their financial investment.”

The policy provides the option to protect fed cattle, feeder cattle or swine. Hudson feels the increase in agricultural input prices in the row crop and livestock sectors as well as the increased prices in the cattle market have prompted more interest in LRP as a risk management tool.

How to select LRP coverage?

The FCS Financial website hosts the daily LRP prices. A producer can visit this page, select the livestock they want to insure, type of livestock and endorsement length to see what the coverage price and subsidized cost per hundredweight are that day. Prices are released around 4 p.m. one day and valid until 8:25 a.m. the next morning. Any policy must be written and signed by 8:25 a.m. to be valid. FCS Financial utilizes DocuSign technology so that producers don’t have to come to an office to put their policy in place.

Is LRP government subsidized?

“Yes, LRP is a government-subsidized program,” said Hudson. “In order to receive the government subsidy you must be compliant at FSA (Farm Service Agency) with an AD-1026 form on file.”

Producers who don’t wish to participate in FSA programs, can still purchase LRP. They will not receive the government subsidy which dramatically changes the price per hundredweight, says Hudson. To find that price, a producer should contact a local crop insurance agent.

Does LRP offer the same benefit if you are a small or large producer?

“From our smaller producers to our larger producers, there’s a spot within LRP insurance for every single person that wants to insure,” states Jessica Hamill, Vice President and Team Leader at FCS Financial. “There are no margin calls, so really, you put the floor in place and you get to walk away and forget it.”

Hamill mentions that if a producer decides they want to keep their heifers they’ve insured to breed them, that’s ok. They must maintain ownership records such as a record of a pregnancy check by a veterinarian.

Ownership verification must be maintained for all livestock insured through LRP. Hudson says many of her producers keep copies of their sale barn receipts as proof of ownership for livestock they sell.

How to set up an LRP insurance policy?

The first thing is to contact an FCS Financial crop insurance agent. The locations map on the website can help producers locate an agent in their area.

“I always encourage people that I am starting to work with, whether they think they’re going to write an endorsement right away or not is to get an application on file,” Hudson advises. The timeframe to write the final policy is so short each day that it makes everything easier if the initial application with signatures is on file before the policy is written.

Missouri is seeing more and more producers utilize LRP as a risk management tool. To get this tool set up on your farm, contact your nearest FCS Financial crop insurance agent or call 1-855-507-2276.

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