Actual Marketings – The total number of slaughter-ready cattle or swine sold in each month of the insurance period.

Adjusted Futures Price – The LGM futures price plus state- and month-specific basis.

Approved Target Marketings – The maximum number of cattle that can be stated as target marketings on the insurance application; based on the lesser of farm capacity or underwriting capacity for the insurance period as determined by the insurance company.

Calf Finishing Operation - The cattle feeding operation eligible for LGM insurance that assumes a cattle placement weight of 550 lbs and a finished weight of 1150 lbs, with cattle consuming 54.5 bushels of corn while being on feed for eight months.

Crop Year – The twelve month period, beginning July 1 and ending on the following June 30 and designated by the calendar year in which the period ends.

Deductible – The portion of an insured value that producers elect not to insure; ranges from $0 to $150 per head in $10 increments for cattle and $0 to $20 per head in $2 per head increments for swine.

Expected Gross Margin (EGM) - The difference between expected livestock selling prices and expected input prices (feeder cattle and corn for cattle or soybean meal and corn for swine) based on LGM futures prices and state- and month-specific basis.

Gross Margin – The market value of cattle less feeder cattle and corn input costs (LGM for Cattle); the market value of swine less soybean meal and corn input costs (LGM for Swine).

Gross Margin Guarantee (GMG) – The expected gross margin minus the deductible selected by the producer; feeding margin insured by the producer.

Indemnity – The difference between the gross margin guarantee and total actual gross margin, if positive, at the end of the insurance period.

Insurance Period – The length of time (11 months for cattle and 6 months for swine) that LGM insurance covers.

LGM Basis – Based on the historical difference between the adjusted futures price (including the policy’s fixed basis) and the local cash selling price producers actually receive (including local basis).

Marketing Report – The document submitted to the insurance agent by the producer indicating the actual marketings for each month of the insurance period.

Notice of Probable Loss – The document from the insurance agent that notifies the producer if an indemnity is to be paid.

Price Discovery Period – The last three days of futures prices (used to determine gross margin guarantee and total actual gross margin) in the corresponding commodity months for fed cattle, feeder cattle, and corn for LGM for Cattle; the last three days prior to the last business day of the month in the corresponding commodity months (lean hogs, corn, and soybean meal) that are used to calculate gross margins for each of the target marketing months for LGM for Swine .

Sales Period – The period when LGM is available for purchase; commences once Risk Management Agency validates the price data that is used to calculate the gross margin guarantee and ends at 9:00 am CST the next business day.

Substantial Beneficial Interest (SBI) – The percentage of ownership held by any person; must be at least 10 percent to be eligible for LGM insurance.

Target Marketings – The number of cattle or swine that are expected to be marketed during the insurance period; cattle or swine insured under LGM.

Total Actual Gross Margin (AGM) – The difference between actual livestock selling prices and actual input prices (feeder cattle and corn for LGM for Cattle and soybean meal and corn for LGM for Swine) based on LGM futures prices and state- and month-specific basis; feeding margin that occurs due to realized, actual prices observed in the market after the 11-month (6-month for swine) insurance period (as determined by RMA).

Yearling Finishing Operation – The cattle feeding operation eligible for LGM insurance that assumes a cattle placement weight of 750 lbs and a finished weight of 1250 lbs, with cattle consuming 57.5 bushels of corn while being on feed for five months.