Livestock Gross Margin

What is Livestock Gross Margin (LGM) insurance?

Livestock Gross Margin (LGM) insurance protects producers against a loss in gross margin—the difference between the market value of livestock or livestock products and feed costs. It’s a powerful risk management tool designed to help you maintain profitability in a fluctuating market.

How does LGM coverage work?

LGM uses futures market prices to calculate both expected and actual gross margins. If the actual margin falls below your guaranteed level, the policy may provide a payment to help offset the difference—helping stabilize your operation’s financial performance.

Which commodities can be covered under LGM?

LGM offers flexible coverage options for a variety of operations, including:

• Cattle
• Swine
• Dairy (milk)

This versatility makes it a valuable solution for diverse livestock producers.

When can I purchase LGM coverage?

Coverage is available on a weekly basis, with sales periods opening when rates are posted and closing the following day. This regular schedule allows you to respond strategically to changing market conditions.

When does coverage begin?

Insurance coverage begins on the first day of the second month following the sales closing date, giving you time to plan and align coverage with your production cycle.

Are there limits on how much I can insure?

No. LGM does not impose limits on the number of head or the amount of milk you can insure, offering scalability for operations of all sizes.

What customization options are available?

LGM allows you to tailor coverage to your operation by selecting:

• Number of head or hundredweight of milk
• Coverage months
• Deductible level
• Feed assumptions (for dairy)

This flexibility ensures your policy aligns with your unique business goals.

Are premium subsidies available?

Yes. Premium subsidies are available and vary based on the deductible you select, helping reduce overall cost while maintaining strong protection.

What types of losses does LGM cover—and not cover?

LGM covers losses related to declines in gross margin due to market conditions. However, it does not cover:

• Death of livestock
• Physical loss or damage
• Other non-market-related risks

Why should I consider LGM for my operation?

With flexible coverage, no production limits, and futures-based pricing, LGM provides a reliable way to manage margin risk and protect your bottom line—so you can focus on running and growing your operation with confidence.