Livestock Gross Margin

Product Overview

Understanding Livestock Gross Margin Insurance

Livestock Gross Margin (LGM) is a federal risk-management program designed to protect against a decrease in margin caused by a drop in livestock prices or an increase in feed costs. LGM can be a good fit for any farm size as it has no head limitations. This product is made even more attractive with the new option to book coverage concurrently with other programs like Livestock Risk Protection (LRP) and Dairy Revenue Protection (DRP). Production cannot be double insured, but coverage end dates for LRP and LGM or DRP and LGM policies can overlap.

Benefits

Coverage is available on fed cattle, swine and dairy production (milk).
Simpler than using options or futures.
Similar to buying a put option on your livestock/ production to be sold plus a call option to limit higher feed costs
Can sign up 12 times a year to insure all milk/livestock production expected to be marketed over a rolling 11-month insurance period
Coverage is subsidized based on deductible
Dairy, cattle and swine premiums are billed at the end of the endorsement period

Basic provisions

Based on futures prices
Producer prepares a Target Marketing Report
- Fed cattle: number in each month of the insurance period
- Swine: number in each month of the insurance period
- Dairy: target milk marketings and feed rations (best reflect actual production)
Insured at 100% share
Dairy/swine/fed cattle is available in all counties in all states
Fed-cattle LGM is for calf and yearling finishing operations
Producer must submit a marketing report and sales receipts for actual marketings for each month within 15 days of receipt of notice of probable loss from the company

Available to all qualifying producers regardless of race, color, national origin, religion, sex, disability, age, marital status, family/parental status, income derived from a public assistance program, political beliefs, or reprisal or retaliation for prior civil rights activity, in any program or activity conducted of funded by USDA (not all bases apply to all programs).

How does Livestock Gross Margin Coverage Work?

Application must be completed on Thursdays after coverage prices and rates are posted on the RMA website and before 8:25 a.m. CST for fed cattle and swine and 9 a.m. CST for dairy
Choose a deductible:
- Fed cattle: $0-$150/head
- Swine: $0-$20/head
- Milk: $0-$2/cwt.
Insurance period:
- Fed cattle, dairy: 11 months
- Swine: 6 months
- Coverage begins in the second month
Gross Margin Guarantee – Actual Gross Margin = Indemnity

Are you covered?

We know crop insurance decisions can feel complicated. Our insurance officers have access to a tool that analyzes your numbers and local data to help you make the best decisions to meet your goals. Get started by completing the inquiry form and we’ll find a time that is convenient for you to meet with us.

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Why Work With Us for Livestock Insurance

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Dedicated Specialists

Our agents are non-commissioned and focus 100% of their time on crop insurance and livestock insurance — every working day of every week in the year. They don’t sell property, casualty or life insurance.

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Highly Trained

Our insurance officers receive annual training on RMA changes to crop insurance and livestock insurance plans and stay informed throughout the year.

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Financial Expertise

As a lender, we understand financial risk and work to protect your working capital, not just your crop or livestock.

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Exclusive Tools

Leverage our exclusive policy review and Hail Analyzer tools to receive a personalized insurance plan - maximizing your net indemnity, cash flow, forward market opportunities, and minimizing your premium costs.