Livestock Gross Margin Insurance For Feed and Price Risk
Margin Protection For Dairy and Swine
Livestock Gross Margin insurance protects the spread between livestock or milk prices and feed costs. If the calculated margin falls below your insured level, a payment helps offset the shortfall. Bath Insurance Group guides producers through monthly purchase windows, coverage selections, and recordkeeping so the policy tracks with your rations and marketing plan.
How LGM Calculates Margins
LGM uses published price indices for outputs and standardized amounts of corn and soybean meal as feed inputs. You select quantities and time periods. At the end of the insured period, the actual index based margin is compared to your insured margin. If it is lower, you receive the difference according to policy terms.
Who Benefits From LGM
Operations with significant purchased feed exposure often find LGM valuable. Dairy farms balancing milk checks against feed bills and swine finishers buying corn and meal can steady margins across volatile seasons. We help estimate coverage that mirrors your production and feed usage.
LGM vs LRP At a Glance
LRP insures output price only, while LGM insures the relationship of output minus feed cost. LGM has monthly sales periods and standardized feed formulas. LRP is available most weekdays and is simpler for many cow calf and feeder operations. We compare both tools and suggest a fit based on your goals.
Program Details and Timing
LGM policies are purchased during scheduled monthly windows. You can layer coverage across several future months up to program limits. Premiums are partially subsidized and due after the insured period. Documentation focuses on volumes insured, not individual animal tags, which keeps administration manageable.
Livestock Gross Margin FAQs
Is LGM only for dairy
No. LGM also serves swine producers. Dairy may also consider Dairy Revenue Protection or DMC. We will discuss options and availability.
How is the feed ration determined
Programs use standardized amounts of corn and soybean meal. It will not match every ration exactly but it captures overall feed cost trends
Can I use LGM and LRP together
Not for the same animals and period. You can choose LGM for one group and LRP for another if that fits your marketing plan.
How does a claim pay
After the period ends, we compare actual index based margin to your insured margin. If lower, an indemnity is calculated and paid. There is no field inspection.
What does LGM cost
Premium depends on insured margin and market volatility. Because it covers both sides of the ledger, it can cost more than LRP. Subsidies help reduce net cost. We will quote options for clarity.
How do I decide between LGM and LRP
If feed costs are your main worry, LGM may fit. If sale price is the focus, LRP may be simpler. We can model both on your recent numbers.
Keep Your Margin Predictable Through Changing Seasons
Feed and livestock prices rarely move in step. Bath Insurance Group will design a margin plan that tracks your production and keeps budgets steady.
