LRP Historical Performance

Well, because Doug found the whole topic more than a little unwieldy, and in need of some chunking down.

What are you actually buying — and is it worth it?

Think of it like insuring your truck. If you can’t afford to lose a $50,000 vehicle, you pay $600 a year to protect it. Your coverage kicks in once you pay the deductible, and if you never have an accident, that’s fine — that’s the deal. Now imagine the federal government picked up 40% of that premium, so your out-of-pocket drops to $360. You’d probably sleep better.

LRP works the same way. You pay a premium to protect your investment in livestock. If prices stay strong, you collect nothing back — and that’s a good outcome. If they drop hard, you may receive a payment that could be the difference between a rough year and a catastrophic one.

Here’s what makes this tool useful: we have the complete historical record — every dollar paid in premiums and every dollar paid out in indemnities going back to 2003. So you can see, to the penny, what you would have paid and what you would have received over any 10- or 20-year window.

What we can’t give you is the future. To think ahead, you’ll need to decide whether the next 10 years will look roughly like the last 10 — or better, or worse. That’s a conversation worth having with your family before you commit.

One more reason to think carefully about this now: federal LRP subsidies tripled starting in 2020. The government now covers 35–55% of your premium depending on coverage level (roughly 40% at common levels), compared to about 13% before. That’s a real change. The numbers below reflect today’s subsidy rate, which makes LRP meaningfully more affordable than it was for most of the historical record this tool draws on.

Finally, keep this in mind: for a typical 100-head, 650-lb steer operation, LRP premiums might run around $1,500 for the coverage period. In most years you’ll collect nothing. But in roughly 3 out of 10 down years, you may get something back. And in one genuinely bad year — the kind that culls herds and forces hard decisions — it might be the thing that keeps the ranch going.

This tool uses actual USDA data from the RMA Summary of Business — every LRP endorsement sold since 2003. For each year and coverage level, it shows what producers actually paid in premiums and what they collected in indemnities. The loss ratio (indemnities ÷ premiums) tells you how much of the premium dollar came back as payouts.

A loss ratio below 1.0 is normal for insurance — you’re paying for protection, not expecting a profit every year. The value shows up in bad years. Use the coverage selector to see exactly what subsidy rate applies to your situation.