Livestock Gross Margin (LGM) is a federally-reinsured livestock product that provides protection against the loss of gross margin.
The RMA monitors capacity levels, and when the funding limit has been reached, sales for this product will cease.
LGM – Dairy
Livestock Gross Margin (LGM) – Dairy Cattle provides protection against the loss of gross margin (market value of milk less feed costs) on the targeted quantity of market milk.
The LGM insurance policy uses futures prices to determine the expected gross margin and the actual gross margin. LGM does not insure against death, loss, unexpected decrease in milk production or unexpected increases in feed use.
The mix of target milk marketings and target feed rations allows a producer to select feed rations and production levels that best reflect their actual production. This effectively insures the producer gross margin (difference between the gross margin guarantee and the actual gross margin at the end of the 11-month insurance period).
LGM – Fed Cattle
Livestock Gross Margin (LGM) – Fed Cattle provides protection against the loss of gross margin (market value of cattle less feeder cattle and feed costs) on fed cattle (yearling and calf).
The LGM insurance policy uses futures prices to determine the expected gross margin and the actual gross margin. LGM does not insure against death, loss, or any other loss or damage to the producer’s cattle.
LGM – Fed Cattle is a bundled option that covers both the cost of feeder cattle and the cost of feed. This effectively insures the producer gross margin (difference between the gross margin guarantee and the actual gross margin at the end of the 11-month insurance period).
LGM – Swine
Livestock Gross Margin (LGM) – Swine provides protection against the loss of gross margin (market value of hogs less feed costs). The LGM insurance policy uses adjusted futures prices to determine the expected gross margin and the actual gross margin.
LGM does not insure against death, loss, or any other loss or damage to the producer’s hogs.
LGM – Swine is a bundled option that covers both the cost of hogs and the cost of feed. This effectively insures the producer gross margin (difference between the gross margin guarantee and the actual gross margin at the end of the 6-month insurance period).
Coverage
Insurance coverage begins on the first day of the second calendar month following the month of the sales closing date.
Deductible
Fed Cattle: $0 – $150 per head (in $10 increments)
Swine: $0 – $20 per head (in $2 increments)
Dairy Cattle: $0 – $2 per hundredweight of milk (in 10 cent increments)
Premium Subsidy
There is only premium subsidy for LGM – Dairy and is determined by the deductible amount selected by the producer.
The information contained in this publication is for general purposes only and shall not modify the terms of any insurance policy.
