(JULY 24) – USDA’s Risk Management Agency (RMA) announced changes to the Livestock Gross Margin (LGM) insurance program for cattle and swine beginning in the 2021 crop year. Changes include adding premium subsidies to assist producers and moving premium due dates to the end of the endorsement period for cattle.
Prior to this change, LGM-Cattle and Swine did not have premium subsidies. Now, subsidies have been added and are based on the deductible selected by the producer.
Aaron Tattersall of Ag Risk Advisors further explains the program:
“The Livestock Gross Margin Insurance Program (LGM) first came out in 2006. The increased subsidy that USDA announced ranges from 18 percent to 50 percent, and is especially useful for cattle feeding operations. Essentially, it allows producers to hold a call on the input costs (feeder calves and feed) and a put on finished cattle in ONE insurance policy. This difference between inputs and revenue represents the “gross margin”, hence the name of the program. Producers can lock in a gross margin guarantee with this insurance.
“The insurance is only sold once per month – on the last Friday of every month – and the premium isn’t due until coverage expires. Contact Ag Risk Advisors today for a quote! All we need from you is the number of fat cattle you expect to market over the next eleven months and we can provide an overview of how this program might work for your operation.”