Livestock Gross Margin Insurance for Dairy Cattle

This section of our website provides information concerning the Livestock Gross Margin for Dairy (LGM-Dairy) program made available by the Risk Managment Agency of USDA.   The site will be under construction over the next few months as new information becomes available and related new materials are added.  Please come back often to see what's new.

As with other sections of this website by clicking on an active link, you may generate an expanded menu.  To make this menu disappear, click on the link again.  If you have material that you think you would find useful please contact Prof. Brian W. Gould with your suggestions.

The material contained within this site is for informational and research purposes only.  The official website concerning material related to the Livestock for Gross Margin for Dairy program is the USDA Risk Management Agency website (http://www.rma.usda.gov).

• Sign-up for the LGM-Dairy Mailing List
  • If you are interested in recieving notification of new LGM-Dairy materials, software upgrades, new data, etc., click here if you want to be placed on our LGM-Dairy Mailing List
• List of LGM-Dairy Providers
  • This is a list of LGM-Dairy Insurance Providers   No endorsement of any individual or firm is implied by this listing.
  
  
  • If you are a dairy insurance provider, you can add your agency information to our LGM-Dairy Insurance Providers database .
• Background Material Made Available by the RMA

  This is a collection of information provided by USDA as to introduce the LGM-Dairy program

  • A Powerpoint File Showing    Program Changes Effective with the Dec. 2010 Contract
  
  
  • LGM-Dairy:   Program Changes Effective with the July 2009 Contract
  
  
  • LGM-Dairy Fact Sheet, June 2010
  
  
  • LGM-Dairy:  Frequently Asked Questions
    • For contracts Sold on or after Dec. 17, 2010
    • 2011 Crop Year PDF File
    • 2010 Crop Year PDF File
    • 2009 Crop Year PDF File
    • 2009 Cropy Year RMA Web Based
  
  
  • LGM-Dairy:  How Are Premiums Calculated?
    • For contracts Sold on or after Dec. 17, 2010  Step-by-Step Instructions
    • 2010:  Step-by-Step Instructions
    • 2009:  Step-by-Step Instructions
  
  
  • LGM-Dairy:  Underwriting Rules
    • For contracts Sold on or after Dec. 17, 2010
    • 2011 Crop Year
    • 2010 Crop Year
    • 2009 Crop Year
  
  
  • LGM-Dairy:   Handbook (#20080)
  
  
  • LGM-Dairy:  Commodity Exchange Endorsement
    • For contracts Sold on or after Dec. 17, 2010
    • 2010 Crop Year
    • 2009 Crop Year
  
  
  • LGM-Dairy:  Basic Provisions, Terms and Conditions
    • For contracts Sold on or after Dec. 17, 2010
    • 2010 Crop Year
    • 2009 Crop Year
  
  
  • LGM-Dairy:  Technical Documentation:  
    • Rating Methodology
  
  
  • LGM-Dairy:   June 2, 2008 Program Announcement
  
  
  • LGM for Cattle RMA Website
  
  
  • RMA Summary of Business Website:  
    • Obtain Information on No. of Contracts Sold
• Supporting Software

  This is a collection of spreadsheet and other software used to exemplify the use of LGM-Dairy

  • LGM-Dairy Analyzer (V 2.0)    This is the version of our LGM-Analyzer that incorporates the changes to the LGM-Dairy program effective with the Dec. 2010 contract offering.  Similar to version 1.0, this version contains the LGM-Dairy Premium Estimator as well as the Least-Cost Optimizer programs.  In addition, we have incorporated a beta version of a Bundled Options strategy that allows for a comparison of the costs (not including broker fees) with LGM-Dairy for approximately the same level of protection.   Note:  This program can be used for analysis of both upcoming and historical LGM-Dairy contracts.  Feedback would be appreciated.
  
  
  • LGM-Analyzer (V2.0) Tutorial Video
    
    
  
  
  • A copy of a Journal of Dairy Science article describing the Least Cost Optimizer component of the LGM-Dairy Analyzer is available.
  
  
  • A spreadsheet template to evaluate an On-Going LGM-Dairy Contract.
  
  
  • Income Over Feed Cost Estimator (Web-Based).
  
  
  • Income Over Feed Cost Estimator (Spreadsheet Based).
  
  
  
  • Speadsheet-Based Grain/Concentrate/Forages Feed Conversion Program (Source:  1995 Dairy Reference Manual)
  
  
  • RMA's Premium Calculator
  
  
  • Web based Grain/Concentrate Converter
  
  
  • Web based Feed-Equivalent Calculator based on the National Resource Council (2001) Nutrients Requirements of Dairy Cattle Publication by Valvekar, Cabrera, Wattiaux and Gould, 2010
  
  
  • User's Manual for the above software system.
• Underlying Data

  This is a collection of data used in the implementation of LGM-Dairy

  • Extensive Grain/Concentrate/Forages Feed Conversion Rates (Source:  1995 Dairy Reference Manual)
  
  
  • Feed Conversion Rates As Specified in the RMA Supporting Material
  
  
  • Dairy Reference Manual:   Use of Feed Conversion Factors
  
  
  • Futures and Options Months Used Depending on Month Insurance is Purchased
  
  
  • Listing of Year and Month Specific Corn and Soybean Meal Futures and Options Contracts Used Depending on Month Insurance is Purchased
  
  
  • Dates Used to Calculate Expected Prices Depending on Month Insurance is Purchased
  
  
  • Class III Actual Price Measurement Dates:  1998-2009
  
  
  • Actual Corn, Soybean Meal and Class III Prices
  
  
  • Expected Corn and Soybean Meal Prices:  1977-2009
  
  
  • Expected Class III, Corn and SBM Prices:  2000-Current
  
  
  • Historical Simulation Data for Premium Calculation

  00	01	02	03	04	05	06	07	08	09	10
  Jan	Jan	Jan	Jan	Jan	Jan	Jan	Jan	Jan	Jan	Jan
  Feb	Feb	Feb	Feb	Feb	Feb	Feb	Feb	Feb	Feb	Feb
  Mar	Mar	Mar	Mar	Mar	Mar	Mar	Mar	Mar	Mar	Mar
  Apr	Apr	Apr	Apr	Apr	Apr	Apr	Apr	Apr	Apr	Apr
  May	May	May	May	May	May	May	May	May	May	May
  Jun	Jun	Jun	Jun	Jun	Jun	Jun	Jun	Jun	Jun	Jun
  Jul	Jul	Jul	Jul	Jul	Jul	Jul	Jul	Jul	Jul	Jul
  Aug	Aug	Aug	Aug	Aug	Aug	Aug	Aug	Aug	Aug	Aug
  Sep	Sep	Sep	Sep	Sep	Sep	Sep	Sep	Sep	Sep	Sep
  Oct	Oct	Oct	Oct	Oct	Oct	Oct	Oct	Oct	Oct	Oct
  Nov	Nov	Nov	Nov	Nov	Nov	Nov	Nov	Nov	Nov	Nov
  Dec	Dec	Dec	Dec	Dec	Dec	Dec	Dec	Dec	Dec	Dec

  
  

  11	12	13
  Jan	Jan	Jan
  Feb	Feb	Feb
  Mar	Mar	Mar
  Apr	Apr	Apr
  May	May	May
  Jun	Jun	Jun
  Jul	Jul	Jul
  Aug	Aug	Aug
  Sep	Sep	Sep
  Oct	Oct	Oct
  Nov	Nov	Nov
  Dec	Dec	Dec

  
  
  • Nutrient National Research Council's Nutrient Composition of Feeds publication (PDF)
  
  
• Additional Material Explaining LGM-Dairy

  This section contains background material related to LGM-Dairy

  • USDA's Livestock Gross Margin Insurance for Dairy:   What is it and How Can it be Used for Risk Management by Brian W. Gould and Victor E. Cabrera, Univ. of Wisconsin-Madison, Sep. 2011
  
  
  • Two 1-hour videos reviewing the use of LGM-Dairy for Revenue Risk Managment
    • Hour 1:   Introduction to LGM-Dairy, October 2011
    • Hour 2:   Use of the UW LGM-Analyzer System for Contract Design, October 2011
  
  
  • LGM-Dairy:  A Risk Managment Tool for Small and Large Dairy Farms , by B.W. Gould and V.E. Cabrera , University of Wisconsin-Madison, June, 2011
    • Powerpoint Presentation Reviewing LGM-Dairy Principles
    • Powerpoint Presentation Showing a Simple Exammple
  
  
  • Managing the Newly Created LGM-Dairy Insurance Under Seasonal Climate Variability, by V.E Cabrera and Daniel Solis, University of Wisconsin-Madison, June 2008
  
  
  • Livestock Gross Margin for Dairy, a two-page/three-fold brochure, June 2009
  
  
  • PowerPoint Presentations Given at 3-Hour LGM-Dairy workshops
    • LGM-Dairy:   Livestock Gross Margin for Dairy: An Overview of Program Principles
    • LGM-Dairy:   A Wisconsin Example
  
  
  • PowerPoint Presentations and Agenda for 6-Hour LGM-Dairy Workshops, June 2009
  
  
  • A PPT File Showing The Relative Costs of Use of a Bundled Options Strategy Versus LGM-Dairy With Some Simplifying Assumptions, May, 2009
  
  
  • Penn State Staff Paper Comparing LGM-Dairy with Other Risk Management Alternatives (An Introduction), June, 2009
  
  
  • Presentation at the 2009 Agricultural and Applied Economics Association Annual Meeting Livestock Gross Margin Insurance for Dairy Cattle:   An Analysis of Program Performance and Cost under Alternative Policy Configurations, July 29, 2009