Growing Beef Newsletter
April 2026, Volume 16, Issue 10
Yes, you can insure that: LRP and LGM
Patrick Wall, ISU Extension and Outreach beef specialist
Cash outlay for feeders, replacement heifer calves, yearlings, bred heifers, and bred cows is certainly higher than ever in all sectors. No doubt, two important programs supporting the market are Livestock Risk Protection (LRP) and Livestock Gross Margin (LGM). Recent updates have made these programs more attractive and less expensive to a much wider audience in the supply chain. Here’s how:
LRP – Unborn calves can now be insured for a future sale date. This program can be utilized for both purchased bred females just arriving on farm as well as pregnant heifers and cows that have been part of the operation already. The premium is subsidized by the government, much like traditional crop insurance. Got 100 cows to calve in April-May? Insure 95 unborn calves up to 599 pounds at weaning. If you bought a group of bred heifers, insure their upcoming progeny to protect your initial investment. Important note: LRP does NOT insure the viability, health, weight, or gavel price for any of those calves. You still have to manage them to the best of your ability. It does insure the futures price for feeder cattle will be at least what you insure it to be, on the date you specify. If the price actually goes up, there’s no penalty or premium increase; simply put those extra dollars in your pocket on sale day.
Wanna hold on to them post-weaning for another 90 days? You can insure them again for a future sale date. Wanna market some on-farm feed through the cattle by feeding them clear to finish? Insure them a third time clear to market weight. Again, you’re setting the floor for the futures market; the top side is still open should the market strengthen further during the feeding period.
LGM – For the feedlot sector, margins matter. This program insures both the revenue side (fed cattle price) and the cost side (feeder cattle price and corn price) of a transaction, working in tandem. While the pile of feed necessary to finish a given set of calves may already be purchased, its value can change. Likewise, futures markets on both fed and feeder cattle can be quite volatile. In some cases, all three segments of LGM can react negatively to each other. This program insures that doesn’t happen for you, with a subsidized premium as well.
The Iowa Beef Collective podcast interviewed Tony Latcham, owner of Stockguard Risk Management, a few weeks ago. The episode does a tremendous job of summarizing both programs and how to effectively use them, regardless of the size and scope of your operation. Tune in to listen here:
YouTube: https://www.youtube.com/@IowaBeefCollective
Spotify: https://go.iastate.edu/P2Y9L9
Apple Podcast: https://go.iastate.edu/C08HNA
This monthly newsletter is free and provides timely information on topics that matter most to Iowa beef producers. You’re welcome to use information and articles from the newsletter - simply credit Iowa Beef Center.
