LGM Dairy Insurance

Sloan-Leavitt Insurance Agency

LGM Dairy Cattle provides protection to dairy producers when feed costs rise or milk prices drop.

LGM Dairy Premium Calculator

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Paul Risenmay—Industry Programs Specialist

LGM Basics

  • Floors milk price (class III, CME)
  • Caps feed costs (Corn & Soy, CBOT)
  • Inexpensive—(as little as $.05/cwt)
  • Flexible—can insure any amount between 1# and 24 million #’s.
  • Claim process is automated and quick.
  • No speculators; must produce milk insured.
  • LGM pays when the margin between milk prices and feed costs contracts.

Advantages of the LGM Policy

Two advantages over traditional options:

  • No margin calls.
  • Producers can sign up for LGM twelve (12) times per year and insure all of the milk they expect to market over a rolling 11-month insurance period.
  • The LGM policy can be tailored to any size farm.
  • Options cover fixed amounts of commodities and those amounts may be too large to be used in the risk management portfolio of some farms.
  • The producer does not have to decide on the mix of options to purchase, the strike price of the options, or the date of entry.

Causes of Loss Covered

LGM for Dairy covers the difference between the gross margin guarantee and the actual gross margin. LGM for Dairy does not insure against death or other loss of destruction of dairy cattle, production loss of milk, or unexpected changes in feed ration.

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Nathan Beus
Agency Co-Owner

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