LRP-Lamb Expected to Be Made Available in May
The Federal Crop Insurance Corporation board of directors has approved a number of program changes to the Livestock Risk Protection-Lamb (LRP-Lamb) plan of insurance.
According to the American Sheep Industry Association, sponsor of the lamb insurance product, LRP-Lamb is targeted to have sales resume in May 2015.
Changes to the program that were approved include a new price prediction model; a revised definition of “Insured Lambs;” removal of the 20-week endorsement; added language to prevent assignment of indemnities to businesses buying, selling, marketing or packing lambs; changes to the daily and annual sales limit; and modifications to how the actual ending values are calculated.
LRP-Lamb provides protection against unexpected declines in the national average price of slaughter lambs. An economic model is used to predict the expected price of slaughter lambs each week. An indemnity is paid if the weekly settlement value is less than the expected price for a specific coverage level.
The weekly settlement value is a five-week average (current week and previous four weeks) of actual national weekly average slaughter lamb prices using weekly “calculated formula live prices."
The price that the producer actually receives for their own lambs is not part of the
Producers can purchase as little as 80 percent coverage and as much as 95 percent coverage of the price in 5 percent increments. Coverage prices will be listed for each coverage level for each of the endorsements (13, 26, or 39 weeks) during the sales period each week. Lambs do not have to be sold on the day the policy expires. But an endorsement period should be chosen that most closely matches the producers production or feeding program. Ownership of the lambs must be maintained up to at least the last 30 days of coverage for the Specific Coverage Endorsement, otherwise coverage will be terminated and no indemnity will be paid on that portion of the endorsement.
Producers are eligible in the states of Arizona, California, Colorado, Iowa, Idaho, Illinois, Indiana, Kansas, Michigan, Minnesota, Missouri, Montana, Nebraska, New Mexico, Nevada, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, South Dakota, Texas, Utah, Virginia, Washington, West Virginia, Wisconsin and Wyoming,
LRP-Lamb is available through a crop insurance agent authorized to sell livestock insurance.