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When will LRP sales restart?
OMAHA (DTN)--Cattle producers and industry organizations are wondering when USDA's Risk Management Agency will resume new policy sales under its Livestock Risk Protection Program.
The program was shut down after it was slammed with 248 applications on Dec. 23, 2003--more than one-fourth the total policies sold last year--reported the Omaha World Herald in the Jan. 15 edition. Dec. 23 was the day USDA announced bovine spongiform encephalopathy had been discovered in a single cow in Washington state. The amount of coverage of those last-minute applications totaled $68 million, the World Herald reported.
The LRP program was introduced in 15 states during the spring of 2003, and offered producers a chance to protect themselves from any unexpected price drops. Fed cattle prices dropped nearly 20 percent after the BSE announcement and cattle prices continue to remain volatile in response to changing export and production estimates.
Widespread media coverage of BSE and the Risk Management Agency's suspension of new LRP policy sales appears to have stimulated more awareness and interest in the livestock insurance program, according to the World Herald.
The Risk Management Agency has not offered any explanation why the program was halted, nor announced when or if new policy sales will resume. The most recent news on the agency's website (http://www.rms.usda.gov) indicates the suspension will be in effect "until further notice," and that they are currently evaluating the rating structure and other components that may be affected by BSE developments.
The Federal Crop Insurance Corporation said they believed the RMA "acted quickly and responsibly to the announcement."
Date: 1/29/04
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