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Subsidy Capture in Livestock Risk Protection Insurance: Assessing Prevalence and Program Exposure

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  • Ryan Feuz

Abstract

This study evaluates the potential for subsidy capture within the USDA's Livestock Risk Protection (LRP) insurance program. We show that contracts with expiration dates aligning with CME option expiration dates are purchased at elevated rates, particularly in feeder cattle and swine. The scale and timing of these purchases are consistent with subsidy capturing trading behavior. In contrast, we find no significant evidence of subsidy capture in fed cattle. Estimated maximum subsidy captures for 2024 reach $10 million in feeder cattle and $29.3 million in swine. Policy reforms targeting contract timing and pricing mechanisms are recommended to protect program integrity.JEL Classification: Q18, Q10, Q19

Suggested Citation

  • Ryan Feuz, 2026. "Subsidy Capture in Livestock Risk Protection Insurance: Assessing Prevalence and Program Exposure," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 48(2), pages 505-517, May.
    • Handle: RePEc:wly:apecpp:v:48:y:2026:i:2:p:505-517
    DOI: 10.1002/aepp.70046
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    More about this item

    JEL classification:

    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy
    • Q10 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - General
    • Q19 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Other

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