The 2027 crop year for livestock policies begins on July 1, 2026. The following changes have been made to the LRP policy for crop year 2027.
Weight Changes:
- Unborn bulls & heifers can now be insured up to 900 lbs. (the previous limit was 599 lbs.)
- Fed cattle -steers & heifers can now be insured up to 1,800 lbs. (the previous limit was 1,600 lbs.)
New question added to the Specific Coverage Endorsement:
- “If the covered livestock were purchased using a forward contract or a similar livestock purchase agreement with the insured as a buyer, please indicate the last day of the delivery period specified in the livestock purchase agreement.”
- The insurance company will verify the delivery date if there is an indemnity, and the number of covered livestock will be adjusted to exclude any livestock purchased (i.e., priced) using a forward contract or similar instruments if such livestock was delivered less than 90 days prior to the End Date.
- Note: This will have to be answered before any endorsement can be booked.
New question added to the Notice of Probable Loss:
- “Were the covered livestock sold using a forward contract or a similar livestock purchase agreement with the insured as a seller? If yes, please indicate the date when the contract was entered into.”
- The number of covered livestock will be adjusted to exclude any livestock sold (i.e., priced) using a forward contract or similar instruments if such contract was entered into more than 60 days prior to the End Date.
Subsidy capture clarifications:
RMA clarified what qualifies as subsidy capture if you sell a put, sell a call, buy a call, or enter into any off-exchange contract. Examples for selling a call are below. If you have any questions on what qualifies as subsidy capture please contact our office.
Unless the producer can demonstrate a clear and inadvertent error, the following practices are presumed to be subsidy capture, and are in violation of section 4(i):
- If the insured buys an SCE, and sells a new call option on the relevant livestock futures contract, such that:
- The call option expiration date is within 4 calendar days of the SCE end date
- The call option is sold within 2 trading days before or 5 trading days after the SCE effective date
- At the time the insured sold the call option, the option premium (per cwt) was higher than 80 percent of their SCE premium
- At the time the insured sold the call option subject to the time period in section 25(a)(2)(ii), the insured also bought the underlying futures contract, such that these 2 positions jointly created a payoff schedule equivalent to selling a put opt