š How Are LRP Prices Set? Letās Talk CME Feeder Cattle Index š
- Eric Wiles
- Aug 13
- 2 min read
At Agrowise Crop Insurance, we believe that informed decisions lead to stronger operations. When it comes to Livestock Risk Protection (LRP), understanding how your coverage is priced is essential. One of the key drivers behind those prices? The CME Feeder Cattle Index.
Letās break it down so you can feel confident in your coverage choices.
ā What Is the CME Feeder Cattle Index?
The CME Feeder Cattle Index is a 7-day weighted average price of qualifying feeder steers sold across 12 major cattle-producing states. Itās designed to reflect real market conditions and ensure fair pricing for LRP policies.
Only specific types of cattle are included:
ā¢ Steers only (no heifers)
ā¢ Must meet frame score and muscling requirements
ā¢ No dairy, exotic, or Brahma breeding
ā¢ Non-U.S. origin cattle are excluded
š Which States Are Included?
The Index pulls data from public sales in these key cattle-producing states:
These states represent a broad and active segment of the U.S. cattle market, making the Index a reliable benchmark.
š How Is the Index Calculated?
Hereās how the CME Feeder Cattle Index comes together:
ā¢ USDA Market News reporters gather data from auctions, direct trades, and video sales.
ā¢ Every pound of qualifying steer sold during the week is weighted equally.
ā¢ The total dollars sold are divided by the total pounds sold to determine the Index price.
ā¢ This price is updated daily and used to help set LRP coverage values.
š Why It Matters to You
The CME Index ensures that LRP prices reflect actual market conditions, not speculation. That means:
ā¢ Transparency in how your coverage is priced
ā¢ Fairness in the value assigned to your herd
ā¢ Confidence in your risk management strategy
Whether youāre selling or protecting your cattle, the Index helps you stay aligned with the market.
š² Want to See the Data for Yourself?
Explore the sources behind the numbers:
ā¢ USDA Market News
ā¢ CME Group Commodity Index Prices
At Agrowise, weāre here to help you navigate the numbers and protect your bottom line. Have questions or ready to get started with LRP coverage? Reach out todayāweāre just a call or message away.
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