LIVESTOCK GROSS MARGIN (LGM)

Protects against a decrease in margin caused by a drop in livestock prices or an increase in feed costs

LIVESTOCK GROSS MARGIN OVERVIEW

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 continues to become more attractive with the addition of premium subsidies on cattle and swine, as well as a potential change to more frequent sales periods.

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: in the 48 contiguous states
  • Fed cattle: specific states (including Farm Credit Services of America’s footprint)
  • 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, gender, religion, age, disability, political beliefs, sexual orientation, and marital or family status.

HOW DOES LGM COVERAGE WORK?

  • Application must be completed between 5 p.m. last Friday business day of the month and 8 p.m. the following evening
  • 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
How does LGM work

Why Work With Us For Livestock Insurance?

Dedicated Specialists

They 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.

Highly Trained

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

Financial Expertise

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

Decision-Making Tools

Our proprietary Optimum tool analyzes federal and private insurance policies to find the best choice whatever your risk management goal.

"They do a good job of giving us information to help make our decision. They've been great with insurance."

Blake & Tasha

Grain & Beef Producers, Nebraska

Blake & Tasha

Ready to Talk?

Contact us if you have questions or need more information. Fill out the form, or connect with your local office using the Office Locator.

FCSAmerica serves farmers, ranchers, agribusinesses and rural residents in Iowa, Nebraska, South Dakota and Wyoming. For inquiries outside this geography, use the Farm Credit Association Locator  to contact your local office.