The Livestock Risk Protection (LRP) policy addresses a key risk factor for hog producers - decling hog prices. Under the policy, a loss payment occurs when the actual ending value is less than the coverage price.

With continuous sales and a choice of insurance periods, you can set up your insurance policies to coincide with your marketing cycles.

The LRP policy provides an alternative to pork producers over traditional marketing options, which are oftern tailored to larger operations. It may offer a less expensive way to protect against potential revenue loss caused by a price decline.

As a pilot program for Iowa pork producers, only a limited number of policies will be sold. While this allows for program integrity, it also means you must make a decision soon.

• Producers sign up for the LRP policy on any business day during normal business hours (7:00 a.m.-8:00 p.m cst).
• Producers can choose to insure for 90, 120, 150, or 180-day periods.
• A 13% premium subsidy lowers your costs to make it an affordable source of risk protection.

How LRP Works

1. Identify Hogs To Insure
   1. A Specific Coverage Endorsement (SCE) is completed. You can insure up to 10,000 hogs on each SCE. The annual limitation on swine insured under the LRP policy in 32,000 head.
2. Select Insurance Period
   1. Determine when the hogs will be ready for market to find the number of days you will need coverage.
3. Choose a Coverage Period
   1. Coverage prices will be published each day and represent the Expected Ending Value times the coverage level you select (70% to 95%).
4. Actual Ending Value Determined
   1. At the end of the insruance period, the Actual Ending Value is calculated using the average of the USDA Agricultural Marketing Services (AMS) cash index price during the ast two days of the insurance period.
5. LRP Loss Determined
   1. If the Actual Ending Value is less than the Coverage Price, an indemnity is due.

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