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 www.rma.usda.gov.