Livestock Risk Protection (LRP) insurance became available for cattle producers in 2003. In 2018, several enhancements and improvements began to take place that resulted in lower costs, increased access, and ease of use for producers using LRP. For example, premium subsidies increased from a flat 13 percent to the current range of 35 to 55 percent, with new and beginning producers receiving an additional 10-15 percent subsidy on top of those rates. The due date for premiums was also moved from the beginning of the insurance period to the end of the insurance period, making it easier for producers to initiate insurance coverage. These, along with other changes, led to a dramatic increase in the use of LRP.
Table 1 contains producer participation data in Nebraska for the LRP-Feeder Cattle insurance program from 2015 to 2025. LRP-Feeder Cattle insurance is available in five different forms for beef cattle: Steers Weight 1 (< 600 pounds); Heifers Weight 1 (< 600 pounds); Steers Weight 2 (600-1000 pounds); Heifers Weight 2 (600-1000 pounds); Unborn Bulls & Heifers Weight 1 (< 600 pounds); Unborn Bulls & Heifers Weight 2 (600-900 pounds); and, Unborn Calves (60-99 lbs. sold within two weeks after birth). The latter version of it was created to provide coverage of beef-on-dairy day-old calves. LRP-Feeder Cattle insurance is also available for Brahman and dairy cattle in the Weight 1 and Weight 2 classes.
Table 1 shows the dramatic increase in sales and volume of cattle covered by LRP-Feeder Cattle insurance in Nebraska starting in 2021. The number of feeder cattle insured annually in Nebraska has increased from the tens of thousands to over half a million head in recent years. Producer loss ratios (returns per dollar of producer premium after subsidy) remain variable depending on market outcomes versus expectations. However, from 2015-2024, 64 percent of LRP-Feeder Cattle policies earning premiums in Nebraska paid out some level of indemnity. The producer loss ratio averaged 1.15 (indemnities exceeded producer premiums by 15 percent) over that period.
Source : unl.edu