By Kurt M. Guidry
LSU AgCenter
The Livestock Risk Protection (LRP) program is a federally subsidized insurance policy designed to help cattle producers manage price risk. The policy guarantees a price level for cattle at a specific future date. If actual prices at that time fall below the guaranteed price, the policy pays an indemnity equal to the difference. In this way, LRP establishes a price floor for cattle, similar to purchasing a futures put option.