On April 17, 202, the Risk Management Agency (RMA) issued Product Management Bulletin: PM-20-027 regarding the expedited release of the actual ending values for swine and dairy under the Livestock Gross Margin (LGM). https://www.rma.usda.gov/en/Policy-and-Procedure/Bulletins-and-Memos/2020/PM-20-027. RMA states that the LGM actual gross margins are posted by the RMA by the end of the first full business week of the months of February, April, June, August, October, and December. RMA states that due to the COVID-19 pandemic and its impact on the livestock industry, RMA is expediting the release of actual ending values to allow producers to receive payments faster. RMA states that as of the close of business on April 17, 2020, it will release the actual ending values for March and April swine and March dairy.
ANALYSIS – It is not exactly clear what RMA is doing here. The term “actual ending value” only appears in the “Insurance Period” section of the LGM policy and states: “If the end date is on a Saturday, Sunday, or federal holiday, or, if for any reason the relevant report is not available to us for that day or any other day of the ending period, then the actual ending value will be based on the most recent reports made prior to that date.” The term is not found elsewhere in the policy. The policy does contain definitions for terms like “actual corn price,” “actual soybean meal price”, “actual swine price,” etc. but it not clear this is what RMA is referring to because these definitions refer to price for the months the contract is expiring. There is a reference to “actual ending values” in the Livestock Gross Margin Insurance Dairy and Cattle Fact Sheet but it only contains a link to “Livestock Reports.” https://www.rma.usda.gov/Fact-Sheets/National-Fact-Sheets/Livestock-Gross-Margin-Insurance-Dairy-Cattle. The Livestock Report only contains a link to LRP Coverage Prices, Rates and Actual Ending Values. No other documents on the LGM website references the “actual ending values.” https://www.rma.usda.gov/Policy-and-Procedure/Insurance-Plans/Livestock-Insurance-Plans. This page does not explain the meaning of “actual ending value.” It may be helpful for RMA to ensure that its LGM policies use the same terms throughout.
All statements made are opinions of the author and are not intended to provide legal opinions or legal advice.