Livestock Risk Protection (LRP) insurance provides producers with a way to establish a price floor, similar to a put option, while still allowing for potential price gains. Unlike market contracts and options, LRP does not require a margin account or broker and is based on cash market index prices, which more accurately reflect the actual ending value of the livestock rather than relying on the futures market. As a federally sponsored program, LRP is typically more cost-effective than other options and is often viewed favorably by lenders, potentially improving lending rates or loan availability.

The Livestock Risk Protection Insurance Plan for Feeder Cattle (LRP-Feeder Cattle) is specifically designed to safeguard against declining market prices. Producers can choose from various coverage levels and insurance periods that align with their cattle's marketing timelines, even if they retain ownership of the livestock. LRP-Feeder Cattle insurance is available year-round through approved livestock insurance agents. Farmers can select a coverage price between 70% and 100% of the Expected Ending Value. If the actual ending value at the end of the insurance period is lower than the chosen coverage price, farmers may receive an indemnity for the difference.