Risk Management Gets a Boost: LRP Beef on Dairy Coverage Explained

What is Livestock Risk Protection?

Livestock Risk Protection (LRP) is a federally subsidized risk management program designed to protect against a decline in livestock prices, allowing producers to set a price floor and mitigate risk from marketplace volatility.

Prior to July 1, the program was mainly designed for beef and livestock producers. On July 1, 2025, LRP program changes went into effect to align with market dynamics and expand coverage for dairy producers. Unborn Calves Coverage is one of the new risk management opportunities for producers and is outlined below.

New: Unborn Calves Coverage

What is the coverage for? Coverage includes beef calves and beef-on-dairy crossbred calves produced by crossing dairy cows.

Why is the coverage important? Coverage protects the value of the crossbred calf market, which has become a critical revenue stream for many dairies.

How does the coverage work? Producers select a coverage period, target weight and coverage price/level.

Coverage period: ranges from 13 to 52 weeks
Target weight: end weight of the calves ranging from 60 to 99 lbs.
Coverage price/level: prices based on Chicago Mercantile Exchange (CME) feeder cattle futures

Additional details: A price adjustment factor (multiplier) is a part of unborn calves coverage, so producers will be able to protect values they’re actually receiving at market. Currently, producers are able to protect upwards of $1,200 per calf.

Example*: Farmer John wants to cover beef-on-dairy crossbred calves expected to be born in October 2025 at a 100% coverage level. He expects the calves to weigh 95 lbs. at the time of marketing.

Expected Feeder Cattle Index for end date of October 2025: $320 per hundredweight
Price Adjustment Factor: 395%
Farmer John can protect a crossbred calf at $1,264 per hundredweight ($320*3.95) which equals $1,200.80 per head at the 95 lb. target weight
Premium/cost after subsidy: $26.20 per head
After the coverage period ends, Farmer John will be due a payment if the CME Commodity Index Prices for Feeder Cattle falls below the price he covered.

*Prices and costs are examples for illustrative purposes only. Prices change daily.

Next Steps

If you’re a beef or dairy producer, these LRP changes open the door to new and improved risk management opportunities. For more program specifics and risk management plan development, please reach out to your Dairy and Livestock Risk Management Specialist or your local Farm Credit East office.

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