LGM Premium Calculatiions

June 28, 2007

Exhibit 140-1

FCIC-Appendix III

LIVESTOCK GROSS MARGIN (LGM)
LIABILITY/PREMIUM CALCULATIONS
Edit Description

Livestock Gross Margin (LGM)
(Insurance Plan Code 82)
GROSS MARGIN GUARANTEE
EXPECTED GROSS MARGIN = (TARGET_MARKET_2 * EXP_GROSS_MARGIN_2) +
(Internal)
(field 7)
(field 17)
(TARGET_MARKET_3 * EXP_GROSS_MARGIN_3) + (TARGET_MARKET_4 *
(field 8)
(field 18)
(field 9)
EXP_GROSS_MARGIN_4) + (TARGET_MARKET_5 * EXP_GROSS_MARGIN_5) +
(field 19)
(field 10)
(field 20)
(TARGET_MARKET_6 * EXP_GROSS_MARGIN_6) + (TARGET_MARKET_7 *
(field 11)
(field 21)
(field 12)
EXP_GROSS_MARGIN_7) + (TARGET_MARKET_8 * EXP_GROSS_MARGIN_8) +
(field 22)
(field 13)
(field 23)
(TARGET_MARKET_9 * EXP_GROSS_MARGIN_9) * (TARGET_MARKET_10 *
(field 14)
(field 24)
(field 15)
EXP_GROSS_MARGIN_10) + (TARGET_MARKET_11 * EXP_GROSS_MARGIN_11)
(field 25)
(field 16)
(field 26)

GROSS_MARGIN_GUAR = EXPECTED GROSS MARGIN - (DEDUCTIBLE *
(field 28)
(Internal)
(field 27)
TOTAL TARGET MARKETINGS)
(Internal)
Note: Gross margin guarantee can be negative.

LIABILITY
LIABILITY = AVG CME PRICE * 12.5 * TOTAL TARGET MARKETINGS
(field 29)
(Internal)
(Internal)

FCIC-APPENDIX III

140-1 - 1

RY 2008

June 28, 2007

Exhibit 140-1

FCIC-Appendix III

LIVESTOCK GROSS MARGIN (LGM)
LIABILITY/PREMIUM CALCULATIONS
Edit Description

SIMULATED LOSSES
SIMULATED GROSS MARGINS(i) =
(Internal)
(SECOND MONTH GROSS MARGIN DRAW(i) * TARGET_MARKET_2) +
(Internal)
(field 7)
(THIRD MONTH GROSS MARGIN DRAW(i) * TARGET_MARKET_3) +
(Internal)
(field 8)
(FOURTH MONTH GROSS MARGIN DRAW(i) * TARGET_MARKET_4) +
(Internal)
(field 9)
(FIFTH MONTH GROSS MARGIN DRAW(i) * TARGET_MARKET_5) +
(Internal)
(field 10)
(SIXTH MONTH GROSS MARGIN DRAW(i) * TARGET_MARKET_6) +
(Internal)
(field 11)
(SEVENTH MONTH GROSS MARGIN DRAW(i) * TARGET_MARKET_7) +
(Internal)
(field 12)
(EIGHTH MONTH GROSS MARGIN DRAW(i) * TARGET_MARKET_8) +
(Internal)
(field 13)
(NINTH MONTH GROSS MARGIN DRAW(i) * TARGET_MARKET_9) +
(Internal)
(field 14)
(TENTH MONTH GROSS MARGIN DRAW(i) * TARGET_MARKET_10) +
(Internal)
(field 15)
(ELEVENTH MONTH GROSS MARGIN DRAW(i) * TARGET_MARKET_11)
(Internal)
(field 16)
Note: (i) = 1,2,…, 5000
SIMULATED_LOSSES = ∑ (MAX (GROSS_MARGIN_GUAR - SIMULATED GROSS MARGINS(i), 0))
(field 30)
(field 28)
(Internal)
Note: Negative simulated gross margins will be included.

TOTAL PREMIUM
TOTAL_PREMIUM = 1.03 * (1/5,000) * SIMULATED_LOSSES
(field 31)
(field 30)

PRODUCER PREMIUM
PRODUCER_PREMIUM = TOTAL_PREMIUM
(field 37)
(field 31)
Note: Subsidy not applicable for LGM.
FCIC-APPENDIX III

140-1 - 2

RY 2008

June 28, 2007

Exhibit 140-1

FCIC-Appendix III

LIVESTOCK GROSS MARGIN (LGM)
LIABILITY/PREMIUM CALCULATIONS
Edit Description

Tag

No.
7

Picture
9(05)

Rounding
whole number

Description
Number of swine or cattle the insured
expects to market in the second month
of the insurance period.

17

(+/-)
9999.9999

per ADM

Expected Gross Margin per swine or
cattle for Second Month from ADM L
Suffix P. Only the negative symbol
( - ) will appear if applicable.

8

9(05)

whole number

Number of swine or cattle the insured
expects to market in the third month of
the insurance period.

18

(+/-)
9999.9999

per ADM

Expected Gross Margin per swine or
cattle for Third Month from ADM L
Suffix P. Only the negative symbol
( - ) will appear if applicable.

9

9(05)

whole number

Number of swine or cattle the insured
expects to market in the fourth month
of the insurance period.

19

(+/-)
9999.9999

per ADM

Expected Gross Margin per swine or
cattle for Fourth Month from ADM L
Suffix P. Only the negative symbol
( - ) will appear if applicable.

10

9(05)

whole number

Number of swine or cattle the insured
expects to market in the fifth month of
the insurance period.

20

(+/-)
9999.9999

per ADM

Expected Gross Margin per swine or
cattle for Fifth Month from ADM L
Suffix P. Only the negative symbol
( - ) will appear if applicable.

11

9(05)

whole number

Number of swine or cattle the insured
expects to market in the sixth month of
the insurance period.

21

(+/-)
9999.9999

per ADM

Expected Gross Margin per swine or
cattle for Sixth Month from ADM L
Suffix P. Only the negative symbol
( - ) will appear if applicable.

12

9(05)

whole number

Number of cattle the insured expects to
market in the seventh month of the
insurance period. Not applicable for
swine.

FCIC-APPENDIX III

140-1 - 3

RY 2008

June 28, 2007

Exhibit 140-1

FCIC-Appendix III

LIVESTOCK GROSS MARGIN (LGM)
LIABILITY/PREMIUM CALCULATIONS
Edit Description

Tag

No.
22

Picture
(+/-)
9999.9999

Rounding
per ADM

Description
Expected Gross Margin per cattle for
Seventh Month from ADM L Suffix P.
Only the negative symbol ( - ) will
appear if applicable. Not applicable for
swine.

13

9(05)

whole number

Number of cattle the insured expects to
market in the eighth month of the
insurance period. Not applicable for
swine.

23

(+/-)
9999.9999

per ADM

Expected Gross Margin per cattle for
Eighth Month from ADM L Suffix P.
Only the negative symbol ( - ) will
appear if applicable. Not applicable for
swine.

14

9(05)

whole number

Number of cattle the insured expects to
market in the ninth month of the
insurance period. Not applicable for
swine.

24

(+/-)
9999.9999

per ADM

Expected Gross Margin per cattle for
Ninth Month from ADM L Suffix P.
Only the negative symbol ( - ) will
appear if applicable. Not applicable for
swine.

15

9(05)

whole number

Number of cattle the insured expects to
market in the tenth month of the
insurance period. Not applicable for
swine.

25

(+/-)
9999.9999

per ADM

Expected Gross Margin per cattle for
Tenth Month from ADM L Suffix P.
Only the negative symbol ( - ) will
appear if applicable. Not applicable for
swine.

16

9(05)

whole number

Number of cattle the insured expects to
market in the eleventh month of the
insurance period. Not applicable for
swine.

FCIC-APPENDIX III

140-1 - 4

RY 2008

June 28, 2007

Exhibit 140-1

FCIC-Appendix III

LIVESTOCK GROSS MARGIN (LGM)
LIABILITY/PREMIUM CALCULATIONS
Edit Description

Tag

No.
26

Picture
(+/-)
9999.9999

Rounding
per ADM

Description
Expected Gross Margin per cattle for
Eleventh Month from ADM L Suffix P.
Only the negative symbol ( - ) will
appear if applicable. Not applicable for
swine.

EXPECTED GROSS
MARGIN

Internal

9(10).99

dollars and cents

Sum of (Target Marketings by month
times Expected Gross Margins by
month).

27

9(04)

NA

Deductible submitted.

TOTAL TARGET
MARKETINGS

Internal

9(05)

NA

Sum of Target Marketings by month.

28

(+/-)
9(10).99

dollar and cents

Expected Gross Margin minus
(Deductible times Total Target
Marketings). Symbols apply and only
the negative symbol ( - ) will appear if
applicable.

AVG CME PRICE

Internal

999.99

NA

3-Day Avg CME Cwt Price from ADM
L Suffix P.

29

9(10)

nearest
dollar

SECOND MONTH GROSS
MARGIN DRAW(i)

Internal

(+/-)
9999.99

per ADM

Second Month Gross Margin Draw
from ADM L Suffix C.

THIRD MONTH GROSS
MARGIN DRAW(i)

Internal

(+/-)
9999.99

per ADM

Third Month Gross Margin Draw from
ADM L Suffix C.

FOURTH MONTH GROSS
MARGIN DRAW(i)

Internal

(+/-)
9999.99

per ADM

Fourth Month Gross Margin Draw
from ADM L Suffix C.

FIFTH MONTH GROSS
MARGIN DRAW(i)

Internal

(+/-)
9999.99

per ADM

Fifth Month Gross Margin Draw from
ADM L Suffix C.

FCIC-APPENDIX III

140-1 - 5

whole

The result of Avg CME Price times
12.5 times Total Target Marketings
rounded to the nearest whole dollar.

RY 2008

June 28, 2007

Exhibit 140-1

FCIC-Appendix III

LIVESTOCK GROSS MARGIN (LGM)
LIABILITY/PREMIUM CALCULATIONS
Edit Description

Tag

No.
Internal

Picture
(+/-)
9999.99

Rounding
per ADM

Description
Sixth Month Gross Margin Draw from
ADM L Suffix C.

SEVENTH MONTH GROSS
MARGIN DRAW(i)

Internal

(+/-)
9999.99

per ADM

Seventh Month Gross Margin Draw
from ADM L Suffix C. Not applicable
for swine.

EIGHTH MONTH GROSS
MARGIN DRAW(i)

Internal

(+/-)
9999.99

per ADM

Eighth Month Gross Margin Draw
from ADM L Suffix C. Not applicable
for swine.

NINTH MONTH GROSS
MARGIN DRAW(i)

Internal

(+/-)
9999.99

per ADM

TENTH MONTH GROSS
MARGIN DRAW(i)

Internal

(+/-)
9999.99

per ADM

Ninth Month Gross Margin Draw from
ADM L Suffix C. Not applicable for
swine.
Tenth Month Gross Margin Draw from
ADM L Suffix C. Not applicable for
swine.

ELEVENTH MONTH GROSS
MARGIN DRAW(i)

Internal

(+/-)
9999.99

per ADM

Eleventh Month Gross Margin Draw
from ADM L Suffix C. Not applicable
for swine.

SIMULATED
GROSS MARGINS(i)

Internal

9(10).99

dollars and cents

Simulated Gross Margins(i) is the sum
of (Gross Margin Draws(i) times
Target Marketings by month).

30

9(10).99

dollars and cents

Sum of (MAX (Gross Margin
Guarantee minus Simulated Gross
Margins(i)), 0).

31

9(10)

nearest whole
dollar

The result of 1.03 times (1/5,000) times
Simulated Losses.

37

9(10)

nearest whole
dollar

Producer Premium equals Total
Premium.

SIXTH MONTH GROSS
MARGIN DRAW(i)

Note: (i) = 1,2,…, 5000

FCIC-APPENDIX III

140-1 - 6

RY 2008