Because there is no minimum number of head to insure with LGM, producers can cover one head up to LGM policy limits. This flexibility allows LGM to be customized to fit the needs of any size operation (within policy limits).

Options and futures contracts cover fixed amounts of commodities. For example, one corn contract represents 5,000 bushels, one fed cattle contract is 40,000 pounds (as many as 33 fed cattle at 1,200 pounds), and one feeder cattle contract covers 50,000 pounds (as many as 67 feeder cattle at 750 pounds).

Many times these contract amounts are too large to be used effectively in the risk management portfolios of smaller operations. LGM thus allows producers with smaller-sized operations to use LGM without hedging more livestock than they plan to sell. LGM insurance, however, can also be used to cover large groups of livestock if desired. The maximum number of head insurable during any insurance period is 5,000 cattle or 15,000 hogs. For a given crop year (July 1 to June 30), producers can insure up to 10,000 head of cattle or 30,000 head of hogs.

Although producers can purchase LGM insurance during any of the 12 monthly insurance periods, the LGM for Cattle insurance period consists of an 11-month coverage period. This allows producers to insure target marketings (i.e., number of head intended to be sold in a particular month) for any of the 11 months except the first month. LGM for Swine consists of a 6-month insurance period with no livestock again insurable in the first month.