Livestock Gross Margin
Livestock Gross Margin (LGM) provides protection for cattle, dairy cattle and hogs in the form of insuring the producer against decreases in gross margin (market value of livestock/livestock product minus the cost of feed). LGM breakdown for different livestock is as follows:
LGM for Cattle provides protection against loss of gross margin (market value of cattle minus feeder cattle and feed costs) on cattle. Essentially, Cattle LGM covers a decline in cattle prices and/or an increase in feed costs and/or an increase in feeder cattle prices.
LGM for Dairy Cattle provides protection against the loss of gross margin (market value of milk minus feed costs) on the milk produced from dairy cows.
LGM for Hogs provides protection of the gross margin between the value of insured hogs and the cost of corn and soybean meal. LGM covers a decline in hog prices and/or an increase in feed costs.