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Livestock Gross Margin (LGM)

Livestock Gross Margin (LGM) protects against the loss of gross margin (market value minus feed costs).

Livestock Gross Margin (LGM) provides protection against the loss of gross or finishing margins caused by a drop in animal prices or increase in feed prices. However, LGM does not insure against death loss or any other loss or damage to the producer’s animals. The policy covers the difference between the gross margin guarantee and the actual gross margin at the end of the insurance period. Futures prices are used to determine the expected gross margin and the actual gross margin. The price the producer receives at the local market is not used in these calculations.

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).

Learn more about Livestock Gross Margin - Dairy

Other Livestock Gross Margin policies are also available.

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).

Not all coverage or products may be available in all jurisdictions. The description of coverage in these pages is for informational purposes only. Actual coverage will vary based on the terms and conditions of the policy issued. The information described herein does not amend, or otherwise affect, the terms and conditions of any insurance policy issued by ProAg or any of its subsidiaries.