Agricultural Economics, Department of
Cornhusker Economics
Accessibility Remediation
If you are unable to use this item in its current form due to accessibility barriers, you may request remediation through our remediation request form.
The Role of Education on Livestock Risk Protection Utilization
Date of this Version
9-16-2026
Document Type
Newsletter Issue
Citation
Cornhusker Economics, September 16, 2026
Agricultural Economics, University of Nebraska-Lincoln
Abstract
In the United States, cattle producers can manage risks in their operations utilizing several federally supported tools. They can also receive education on utilization of these tools. Livestock Risk Protection (LRP) is one such tool that provides feeder cattle producers with insurance against falling national prices. While LRP is tied to the underlying futures market, it offers flexibility to enroll animals on a per-head basis, which is valuable especially for smaller operations.
LRP is offered through the Federal Crop Insurance Program (FCIP), jointly administered by the United States Department of Agriculture-Risk Management Agency (USDA-RMA) and the Federal Crop Insurance Corporation (FCIC). FCIP subsidizes producers’ premium payment to encourage insurance participation. Also, USDA spends significant resources on producer education on LRP to increase awareness and potential adoption.
Besides changes in the subsidy rate and program adjustments, producer education on feeder cattle LRP has been continuous. Producers receive education from various sources, including the Extension Risk Management Education (ERME) program. ERME provides the best documented evidence of the educational effort on LRP. The United States Department of Agriculture-National Institute of Food and Agriculture (USDA-NIFA) competitively funds regional ERME centers (4 regional centers and one digital center) to, in turn, administer regional competitive grant programs that fund producer-focused education projects, including those addressing LRP.
Our study is the first to provide evidence of effects of these long-term educational initiatives on promoting LRP utilization. Using a state-year panel data set from 2003 to 2023 and a two-part econometric model, we distinguished the effects of factors that affect insurance participation decision with those governing the level of insurance participation in LRP utilization. In brief, we find that the role of education is valuable to build the knowledge base, and the effect depends on producers’ familiarity with the product, evolution of the product, and financial incentives received by producers.
The study provided evidence of the impact of education on producer risk management practices. The ERME program is designed to support projects that educate producers and help them manage risk. This study helps document that education plays an important role in risk management even as programs and economic conditions continue to change.