Livestock Revenue Program
Livestock Gross Margin (LGM) - Swine
Livestock Gross Margin provides revenue protection. It's specifically designed
to help protect your profit margin. You receive benefits when the difference
between hog prices and feed costs at the time your hogs are sold is less than
the gross margin guarantee for the coverage period. Expected prices for hogs
are set by the Chicago Mercantile Exchange lean hog futures. Corn and soybean
meal prices are set by the Chicago Board of Trade futures. Up to 15,000 hogs
can be insured during each insurance period. You may select a level of coverage
of 80%, 85%, 90%, 95% or 100% of the expected gross margin.
There are twelve insurance periods in each calendar year. Each
insurance period runs six months and no swine can be insured the first month of
any insurance period. Coverage begins on your swine one full calendar month
following the sales closing date, unless otherwise specified in the Special
Provisions, provided the premium for the coverage has been paid in full. For
example, for the contract with a sales closing date of January 31, coverage
will begin on March 1.
Livestock Gross Margin (LGM) - Cattle
The Livestock Gross Margin for the Cattle Policy provides insurance
for the difference between the Gross Margin Guarantee and the Actual Total
Gross Margin based on a Producer’s Target Marketings and futures prices prior
to and during the insurance period. This Policy does not insure against death
or other loss or destruction of cattle.
There are twelve insurance periods in each calendar year. Each
insurance period runs 11 months, and no cattle can be insured during the first
month of any insurance period. Coverage begins on your cattle one full calendar
month following the sales closing date, unless otherwise specified in the
Special Provisions, provided the premium for the coverage has been paid in
full. For example, for the contract with a sales closing date of January 31,
coverage will begin on March 1.
Livestock Risk Protection (LRP)
Livestock Risk Protection is designed to provide protection on fed cattle,
feeder cattle, and swine against a price decline during the policy coverage
period. LRP is priced and available for sale continuously throughout the year.
Coverage is determined by multiplying the number of livestock to be marketed
times the market weight times the coverage price times the insured share.
Coverage levels range from 70%-95% of the daily livestock prices.
Note: Terrorism is not an exposure covered by Federal Crop Insurance Corporation
on any of the Federally reinsured crop insurance policies (RA, MPCI, CRC,
etc.). These policies cover losses due to drought, flood, or other
natural disasters.
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