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Changes Make LGM-Dairy More Attractive

Changes Make LGM-Dairy More Attractive
Revised gross margin insurance plan go on sale Dec. 17.

U.S. Department of Agriculture's Risk Management Agency recently announced revisions to the Livestock Gross Margin Dairy Cattle insurance plan. The revised 2011 LGM-Dairy insurance plan will be available for sale on December 17, 2010.

This insurance program provides dairy producers a monthly enrollment opportunity to develop a financial safety net for their business plan for the year ahead, explains Gene Gantz, RMA consultant based in Pennsylvania. The protection is for the last 10 months of each 12-month enrollment period.

The changes include: 

  • Premium due at period end: Rather than an up-front payment, premiums will now be due at the end of the coverage the coverage period..
  • Multi-month subsidy: A premium subsidy will be available for policies that insure multiple months during the insurance period. It'll be determined by a dollar deductible selected by the policyholder (from $0 to $2, in 10-cent increments). Policyholders choosing a $0 deductible will receive a lower premium subsidy (18%). Those choosing the highest deductible of $2 will receive a higher premium subsidy (50%).
  • Higher deductibles: The maximum dollar deductible has been increased from $1.50 to $2. Higher deductibles allow producers flexibility to cover a minimum gross margin, providing protection similar to catastrophic coverage.
  • Adjustment of feed loads: Feed values have been updated based on information provided by the National Milk Producers Federation.

LGM-Dairy is sold on the last business Friday of each month. Due to the holiday, sales for December are December 17. For more details, see RMA's Web site at

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