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USDA improves livestock insurance policies

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USDA livestock insurance policies have seen increased participation over the last year.

USDA’s Risk Management Agency is updating livestock insurance policies. The RMA updates to the Dairy Revenue Protection (DRP) and Livestock Gross Margin (LGM) policies will be effective for the 2022 and succeeding crop years.

“We are always looking for ways to improve the insurance program and coverage for our producers,” said RMA Acting Administrator Richard Flournoy. “We strongly feel that these updates will benefit producers and their dairy and livestock operations in the years to come.”

Updates to DRP

DRP has been RMA’s most successful livestock product. In just its second year, it covered about 30% of milk production. It provided critical protection against unexpected decreases in prices, due to COVID and other causes, paying around $478 million to dairy producers.

The changes for the 2022 crop year include:

  • Ensuring the Class Pricing Option remains available for purchase even when either the Class III or Class IV milk price is not published.
  • Relaxing records requirements by allowing monthly total pounds of milk and milk components (butterfat and protein) to be acceptable records instead of daily.
  • Modifying weekend sales period to end on Sunday at 9 a.m. Central Time.

Updates to LGM

LGM is available for cattle, dairy, and swine producers and provides protection against loss of gross margin (market value of livestock minus feed costs). The LGM programs have also seen an increase in participation over the last year. The total insured livestock and livestock products increased approximately 103% from 2019 to 2020.

The changes for the 2022 crop year include allowing producers to purchase coverage on a weekly basis instead of monthly, which will allow producers to be more effective at managing the risks to their operations.

Additional Opportunities

In addition to DRP and LGM, another insurance option for livestock producers is Livestock Risk Protection (LRP), which is available for feeder cattle, fed cattle, and swine. It provides protection against declining market prices. Recent changes, which include increased head limits and additional subsidy increases, have resulted in a 1,000%-plus increase in program participation compared to the 2020 crop year.

Source: USDA, which is solely responsible for the information provided and is wholly owned by the source. Informa Business Media and all its subsidiaries are not responsible for any of the content contained in this information asset. 
TAGS: Livestock
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