Insurance programs: USDA updates livestock insurance programs to expand coverage, flexibility
The U.S. Department of Agriculture’s (USDA) Risk Management Agency recently announced a series of updates to improve several livestock insurance programs, with a focus on expanding risk management options for producers nationwide.
According to a corresponding June 23 press release, updates will take effect for the Livestock Risk Protection (LRP), Livestock Gross Margin (LGM) and Dairy Revenue Protection (DRP) programs beginning in the 2026 crop year.
Updates will include new coverage options, adjusted termination dates and billing timelines and expanded eligibility for forward contracts and specific livestock classes.
LRP updates
The USDA’s LRP program provides protection for livestock producers looking to insure against declining market prices and offers coverage levels ranging from 70 to 100 percent of expected ending values.
Key changes being made to the LRP program include adjusting the termination date to Sept. 30 and moving the premium billing date to the first day of the second month following the policy end date; allowing coverage under forward contracts or purchase agreements and requiring producers to submit proof of delivery and a copy of the agreement.
USDA also announced they will add two new types of LRP coverage including feeder cattle and fed cattle.
“Unborn calves will provide coverage for beef or beef-dairy cross calves sold within two weeks after birth,” reads the release. “Cull cows will provide coverage for dairy cull cows with a coverage limitation of 13 weeks.”
Additionally, USDA introduced a drought exemption for feeder cattle based on the U.S. Drought Monitor’s Drought Severity and Coverage Index and will require additional records for feeder cattle, including documentation of sex in marketing or purchase records and details of when cattle were purchased and not marketed within 60 days of the policy’s end date.
LGM changes
USDA notes its LGM program provides protection for cattle, dairy and swine producers against unexpected decreases in gross margin, defined as the market value of livestock or milk minus input costs.
The program calculates the expected gross margin for a certain period using future market prices and pays an indemnity to the extent that the actual gross margin is less than the expected gross margin.
For the 2026 crop year, the LGM termination date is being shifted to Aug. 31, with premium billing occurring on the first day of the second month after the endorsement end date.
DRP modifications
According to USDA, the DRP program is designed to protect dairy farmers from unexpected declines in quarterly milk revenue.
Updates to the program aim to enhance flexibility and address issues related to the potential misuse of premium subsidies.
Changes include a new termination date of Jan. 31 and a premium billing date of the first day of the third month after the policy’s end date.
USDA notes the program will now offer greater flexibility for producers affected by eligible animal disease, including a clearer process for reporting and adjusting coverage if milk marketing is prevented, but producers must provide written notice within 72 hours of the event.
Minimums for declarable butterfat and protein tests for component pricing have been raised to reflect current herd genetics and nutrition. Now, the minimum declarable butterfat test is four pounds, and the maximum declarable butterfat test is six pounds, while the minimum declarable protein test is 3.2 pounds.
Updates to the DRP program also prohibits “subsidy capture,” defined as using DRP premium subsidies while simultaneously using private trade to offset market risk. Producers must now sign a certification statement acknowledging this rule.
Additionally, the USDA is authorized to review brokerage accounts if prohibited practices are suspected and there are stricter limits and documentation requirements for correcting errors on coverage elections.
Hannah Bugas is the managing editor of the Wyoming Livestock Roundup. Send comments on this article to roundup@wylr.net.
