Swine
Livestock Risk Protection (LRP)
Livestock Risk Protection – Swine, like all LRP policies, is federally reinsured and protects against a decline in market prices. LRP – Swine settles to the Lean Hog index (HEv5) for the Chicago Mercantile Exchange (CME). Coverage is purchased on a per head basis, and you may select from various coverage levels and periods to match the time the swine will be marketed. LRP Swine can be purchased year round, which makes it more flexible to everyone’s marketing needs. Updates involving rates, pricing, and ending values are available to customers and producers alike daily.
Eligibility
For the LRP – Swine program, the only distinctions are “no type specified and unborn”. However, covered hogs are expected to be around 200-300 pounds live weight, or 1.5-2.25 hundredweight when they go to market. For swine producers, the per endorsement limit is much higher at 70,000 hogs, with a limit of 750,000 hogs per year.
Details
For LRP – Swine policies, specific coverage endorsement options are available for 13, 17, 21, 26, 30, 34, 39, 43, 47, or 52 weeks for each specific coverage endorsement. LRP – Swine policies are also currently available in all counties in all 50 states. Additionally, to receive an insurance payment, you must provide sales records for your hogs.
Coverage may be purchased after the price guarantee has been posted to the RMA (Risk Management Agency) website and before 9:00 am Central Time the following day. After enrolling into the LRP – Swine Policy, coverage starts the same day or when the RMA approves the purchase. This program is built to take some burden away from our producers by protecting them from potential drops in livestock prices. One thing to note is death, loss, and poor performance is not covered under this policy. Although mortality is not covered, if you report deaths to your AIP within 72 hours, you may remove the animal from your policy if you so choose.
LRP swine differs from trading futures in that trading futures require 40,000 pound contracts, or, 200 head of 200 pound swine. These contracts can leave many operations caught in the middle between contracts. As LRP is on a per head basis, it is a much more customizable option for an operation’s risk management strategy.