Livestock Gross Margin Insurance for Dairy Cattle: An Analysis of Program Performance and Cost under Alternative Policy Configurations

Abstract

Livestock Gross Margin insurance for dairy cattle (LGM-Dairy) is a risk management tool that can be used to insure a lower bound on a dairy producer’s gross margin. In this paper we (1) review the basic structure of LGM-Dairy (2) examine the sensitivity of Gross Margin Guarantee (GMG) and premium to changes in feeding regimes and (3) quantify impacts of changes in deductible level on important program characteristics.Dairy Price Risk, Uncertainty, Livestock Insurance., Agribusiness, Farm Management, Financial Economics, Livestock Production/Industries, Production Economics, Risk and Uncertainty,