Livestock Risk Protection (LRP) is seeing several meaningful updates heading into Reinsurance Year (RY) 2027. Here’s a brief outline of what producers need to know.
Concurrent Coverage with LGM
One of the bigger policy shifts for RY2027 is the allowance of concurrent coverage between LRP and LGM-Cattle.
Previously, if you had any LRP coverage in place for a given period, you were blocked from purchasing LGM coverage that overlapped with that same window, even if your LRP coverage didn’t fully protect your operation. The restriction was designed to prevent double-dipping on indemnity payments, but in practice it left producers unable to fill legitimate coverage gaps.
Starting with coverage purchased on or after July 1, 2026, that changes. Here’s how the new concurrent coverage rules work:
- Aggregate coverage is what counts: Policies will no longer be evaluated independently for production limits. Instead, the combined insured amount across both LRP and LGM-Cattle is compared against what the producer actually marketed.
- Same AIP required: Both policies must be held with the same Approved Insurance Provider (AIP) to qualify.
- No double-collecting: While you can now layer the two programs, you still cannot collect indemnities on more production than actually existed. The combined insured amount is evaluated, rather than each policy independently.
For more details on how this applies to the applicable dairy and livestock insurance programs, check out our blog post here.
Enhanced Subsidies for Beginning Farmers and Ranchers
RY2027 also brings a meaningful improvement to LRP premium subsidies for beginning farmers and ranchers. Previously, beginning farmers received a flat 10% subsidy increase for their first five years. The new tiered structure provides enhanced subsidies for five more years with more front-loaded support, with the largest benefit in the earliest, most financially vulnerable years:
- Year 1-2: 15% additional subsidy
- Year 3: 13% additional subsidy
- Year 4: 11% additional subsidy
- Years 5-10: 10% additional subsidy
Cull Cow Coverage Extended to 52 Weeks
Previously, LRP cull cow coverage was only available up to 13 weeks out. For RY2027, that window expands dramatically, as producers can now purchase cull cow coverage up to 52 weeks in advance. This gives producers significantly more lead time to lock in price protection for cull cows, bringing the coverage horizon more in line with other LRP endorsements.
New Price Adjustment Factors for Predominantly Dairy Feeder Cattle
RY2027 introduces dynamic price adjustment factors (PAFs) for the predominantly dairy feeder cattle category, applying a similar approach already used for unborn calves. As a reminder, the PAF is multiplied by feeder cattle futures to determine the coverage price per cwt. The new dynamic PAFs will be based on the historical relationship between the feeder cattle index and actual market prices, providing a more accurate reflection of value compared to the previous static figure of 0.5.
The new factors apply to both Weight 1 and Weight 2 classes for predominantly dairy and unborn dairy feeder cattle. According to Bozic LLC, if implemented in late May, the new PAFs would fall in the range of 1.22 to 1.41 for the Weight 1 class and 0.75 to 0.81 for the Weight 2 class.
Forage Disaster Exemption
What was previously called the “Drought Hardship Exemption” is being renamed and expanded into a broader Forage Disaster Exemption for RY2027.
In 2026, the Drought Hardship Exemption allowed producers to sell cattle more than 60 days before the end of their SCE coverage period and still receive an indemnity, but only if drought conditions substantially worsened during the coverage period. The trigger was narrow and limited to drought alone.
The new Forage Disaster Exemption expands both the name and the scope:
- Persistent drought during the grazing period now qualifies, not just a sudden worsening of conditions.
- Forced sales due to fire or other natural disasters are now covered triggers, as well.
Increased Maximum Weight for Fed Cattle
LRP is raising the maximum insurable weights for fed cattle endorsements, giving producers more flexibility when insuring heavier animals:
- Cull Cows: Increasing the maximum weight from 15 cwt to 17 cwt.
- Steers & Heifers: Increasing the maximum weight from 16 cwt to 18 cwt.
New Weight Class for Unborn Feeder Cattle
RY2027 introduces a new weight range for unborn feeder cattle, expanding the insurable class from the existing options to now include a 6 to 9 cwt range. The new Weight 2 class is available for Unborn Bulls & Heifers, Unborn Brahman, and Unborn Dairy.
Updated Price Model for Expected Ending Values of Fed Cattle
LRP-Fed Cattle settlements rely on the AMS “5 Area Weekly Weighted Average Direct Slaughter Cattle” price series, and the spread between that benchmark and CME live cattle futures has widened in recent years. Tighter cattle supplies, improved quality grades, and shifts in where cash trade is concentrated have all played a role. The spread also tends to follow a seasonal pattern, with stronger values in late spring and softer values heading into winter.
Beginning with RY2027, the model used to calculate LRP-Fed Cattle Expected Ending Values will be revised to better capture those dynamics. According to Bozic LLC, securing coverage for March through August end months will generally look more attractive under the new model, while September through February end months may price out slightly lower than before. Overall, this update should provide greater accuracy to the expected ending values under this coverage option.
Cattle Inventory Report Closes LRP Sales
Starting in RY2027, LRP sales will be suspended on days when the USDA Cattle Inventory report is released. This report is published on a biannual basis, and on those release days, LRP coverage will not be available for purchase.
These changes take effect for RY2027, which starts July 1, 2026. Contact HighGround for details on how these updates apply to your specific operation. For a side-by-side look at all the RY2027 changes, download our one-page cheat sheet covering DRP, LRP, and LGM.
