Insurance
Southwest Commodities is licensed to sell (LRP) livestock risk protection insurance for Fed cattle and Feeder cattle.
Fed Cattle
LRP – Fed Cattle is a federally-reinsured livestock product that provides single peril risk protection against the decline in fed cattle price over the insurance period. Producers may select from a variety of coverage levels and insurance periods to match the time the fed cattle would normally be marketed. This insurance may be purchased throughout the year. Premium rates, coverage prices, and actual ending values are posted online daily. LRP does not insure against death, loss or poor performance. At the end of the insurance period, if the actual ending value is below the coverage price, an indemnity would be paid for the difference.
Feeder Cattle
LRP-Feeder Cattle is a federally-reinsured livestock product that provides protection when the national cash price index, as reported by the Chicago Mercantile Exchange (CME), falls below the insured’s price coverage level. Producers may select from a variety of coverage levels and insurance periods to match the time the feeder cattle would normally be marketed. This insurance may be purchased throughout the year. Premium rates, coverage prices, and actual ending values are posted online daily. LRP does not insure against death, loss or poor performance. At the end of the insurance period, if the actual ending value is below the coverage price, an indemnity will be paid for the difference.
What to Expect in a Loss Situation
After RMA releases the actual ending values after the end date of the endorsement period, the Hudson Crop Claims Team will verify coverage prices and compare to actual ending values. If the actual ending value is less than the coverage price, an indemnity is due.
Livestock Insurance Overview
The extremely volatile conditions of the market often cause producers to have more questions than answers, especially in determining how to manage the downside effects on their business. Livestock Risk Protection (LRP), Livestock Gross Margin (LGM) and Dairy Revenue Protection (DRP) are viable and flexible ways to manage the risks associated with price volatility, increasing production costs and tightening profit margins.