Cattle Insurance

Cattle and beef producers face a lot of uncertainty, from price volatility to rising feed costs to concerns over droughts. Fortunately, CIH is here to provide your operations with more stability and security thanks to our cattle insurance expertise. With our guidance, producers like you can have protection against these risks and protect forward margins.

Livestock Risk Protection (LRP)
LRP provides coverage against market price declines.

Pasture, Rangeland and Forage (PRF)
PRF is a subsidized insurance plan designed to offset the cost of rising feed expenses due to lack of precipitation.

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Livestock Risk Protection (LRP) – Cattle

Price Protection

  • Insure against declining market prices

  • Maintain flexibility to higher prices

Subsidized Premiums

  • 35-55% based on coverage

  • Premiums due at the end of coverage

Daily Offerings

  • Coverage updates based on board prices

  • Offered 13-52 weeks out

  • Updated after every trading day

Customizable Policy

  • Choice of coverage price and length of coverage

  • Endorse specific number of head and weight

Cash Settlement

  • Settles to 5 Area Cash or Feeder Cattle Index

  • Eliminates basis risk of futures vs. cash

CIH Tools

  • LRP Calculator

  • Daily Summary

  • Weekly Newsletter

What is LRP?

  • Subsidized program to insure feeder and fed cattle producers against declining market prices. Producers choose from different price levels and periods for coverage (13-52 weeks). For each endorsement, producers can choose a specific number of head to cover at a specific weight.

  • Subsidies range from 35-55% of the RMA premium and are based on coverage level.

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When is LRP offered?

  • LRP is offered every trading day. Coverage prices are released every afternoon and based on the previous futures market close. Coverage can be purchased until 8:25 AM CT the next day.

  • Expiration dates are offered each month and are not tied to live cattle or feeder cattle contract months.

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How does LRP settle?

  • LRP settles to cash (5 Area cash for fed cattle, Feeder Cattle Index for feeder cattle).

  • Indemnity is paid if coverage price is greater than ending price.

  • Premium is due at the end of the endorsement and based on coverage price and rate from RMA.

Any head requirements/limits?

  • No head minimums, but maximum 25,000 head for feeders and 25,000 for live cattle.

The CIH Advantage: Integrated Cattle Risk Management

CIH considers LRP a risk management tool to use alongside a broader risk strategy. Using our data and analysis tools, we help integrate LRP into your overall risk management plan.

  • Quoting tools to help you quickly access updated LRP coverage levels and prices.

  • Daily analysis reports to compare LRP coverage against historical seasonals and basis levels.

  • Software to incorporate LRP positions with other hedge positions (futures, options, cash contracts, etc.).

  • Ongoing consulting to adjust hedge positions and insurance needs

  • Integration of LRP with futures/options hedging strategies

Pasture, Rangeland, and Forage Insurance (PRF)

The Pasture, Rangeland, and Forage insurance was designed to help protect a producer’s operation from the risks of forage loss due to the lack of precipitation.

  • Subsidized premiums make the program affordable.

  • Allows for protection of up to 90% of average rainfall for grass or hay land.

  • Easy to manage, no loss claims to file.

  • Ideal for grazing and feed producing operations.

  • Area-based program using NOAA rainfall grids.

  • Subsidized premiums up to 59%.

CIH proprietary PRF analysis tools inform your coverage decisions. Contact us for a customized quote today.

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About the Program

The Risk Management Agency’s (RMA) Pasture, Rangeland, Forage (PRF) Pilot Insurance Program is designed to provide insurance coverage on pasture, rangeland, or forage acres.

The PRF program utilizes a rainfall index to determine precipitation for coverage purposes automatically and does not require production or loss of production reports. The Rainfall Index uses National Oceanic and Atmospheric Administration Climate Prediction Center (NOAA CPC) data, which utilizes a grid system to determine precipitation amounts within an area. Each grid is 0.25 degrees in latitude by 0.25 degrees in longitude, which translates to approximately 17 by 17 miles at the equator. Acres can be assigned to one or more grids based on the location to be insured.

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Market information offered by Commodity & Ingredient Hedging, LLC, a commodity trading advisor registered with the CFTC and a Member of NFA. Insurance services provided by CIH Insurance Services, LLC. The information contained in this publication is taken from sources believed to be reliable, but is not guaranteed by Commodity & Ingredient Hedging, LLC, nor any affiliates, as to accuracy or completeness, and is intended for purposes of information and education only. Nothing therein should be considered as a trading recommendation by Commodity & Ingredient Hedging, LLC. There is a risk of loss in futures and option trading. Past performance is not indicative of future results.

Issuance of insurance coverage is subject to underwriting review and approval. Coverage not available in all states. Please see the policy for the full terms, conditions and exclusions. CIH Insurance Services, LLC is an insurance agency licensed to sell certain insurance products and may receive compensation from insurance companies for such sales. Policy obligations are the sole responsibility of the issuing insurance company. Coverage scenarios are hypothetical and shown for illustrative purposes only. Coverage is dependent on the actual facts and circumstances giving rise to a claim. CIH is an equal opportunity employer and provider.© CIH. All rights reserved.

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