LGM Indemnity Calculations - Exhibit 140-3

June 28, 2007

Exhibit 140-3

FCIC-Appendix III

LIVESTOCK GROSS MARGIN (LGM)
INDEMNITY CALCULATIONS
Edit Description

Livestock Gross Margin (LGM)
(Insurance Plan Code 82)
TOTAL GROSS MARGIN (ACTUAL)
TOT_GROSS_MARGIN = ((TARGET MARKET 2 * ACT_GROSS_MARGIN_2) +
(field 23)
(Internal)
(field 13)
(TARGET MARKET 3 * ACT_GROSS_MARGIN_3) + (TARGET MARKET 4 *
(Internal)
(field 14)
(Internal)
ACT_GROSS_MARGIN_4) + (TARGET MARKET 5 * ACT_GROSS_MARGIN_5) +
(field 15)
(Internal)
(field 16)
(TARGET MARKET 6 * ACT_GROSS_MARGIN_6) + (TARGET MARKET 7 *
(Internal)
(field 17)
(Internal)
ACT_GROSS_MARGIN_7) + (TARGET MARKET 8 * ACT_GROSS_MARGIN_8) +
(field 18)
(Internal)
(field 19)
(TARGET MARKET 9 * ACT_GROSS_MARGIN_9) + (TARGET MARKET 10 *
(Internal)
(field 20)
(Internal)
ACT_GROSS_MARGIN_10) + (TARGET MARKET 11 * ACT_GROSS_MARGIN_11))
(field 21)
(Internal)
(field 22)

MARKET FACTOR and ADJUSTED INDEMNITY FLAG
MARKET FACTOR = TOT_ACTUAL_MARKET / TOT TARGET MARKET
(Internal)
(field 12)
(Internal)
(Note)
Note: If Market Factor < .750 set Adjusted Indemnity Flag (field 24) to ‘Y’; else, default Market Factor to
1.000 and set Adjusted Indemnity Flag to ‘N’.

INDEMNITY
INDEMNITY_AMOUNT = (GROSS MARGIN GUAR - TOT_GROSS_MARGIN) * MARKET FACTOR
(field 25)
(Internal)
(field 23)
(Internal)
INDEMNITY_REDUCT = 1.000 - MARKET FACTOR
(field 26)
Note: An indemnity is calculated and payable if Total Gross Margin is less than Gross Margin Guarantee.

FCIC-APPENDIX III

140-3 - 1

RY 2008

June 28, 2007

Exhibit 140-3

FCIC-Appendix III

LIVESTOCK GROSS MARGIN (LGM)
INDEMNITY CALCULATIONS
Edit Description

Tag

No.
Internal

Picture
9(05)

Rounding
whole number

Description
Target Marketings for Second Month
reported on premium for swine or cattle.

13

(+/-)
9999.9999

per ADM

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

TARGET
MARKET 3

Internal

9(05)

whole number

Target Marketings for Third Month
reported on premium swine or cattle.

14

(+/-)
9999.9999

per ADM

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

TARGET
MARKET 4

Internal

9(05)

whole number

Target Marketings for Fourth Month
reported on premium swine or cattle.

15

(+/-)
9999.9999

per ADM

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

TARGET
MARKET 5

Internal

9(05)

whole number

Target Marketings for Fifth Month
reported on premium swine or cattle.

16

(+/-)
9999.9999

per ADM

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

TARGET
MARKET 6

Internal

9(05)

whole number

Target Marketings for Sixth Month
reported on premium swine or cattle.

17

(+/-)
9999.9999

per ADM

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

TARGET
MARKET 7

Internal

9(05)

whole number

Target Marketings for Seventh Month
reported on premium for cattle. Not
applicable for swine.

18

(+/-)
9999.9999

per ADM

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

140-3 - 2

RY 2008

TARGET
MARKET 2

FCIC-APPENDIX III

June 28, 2007

Exhibit 140-3

FCIC-Appendix III

LIVESTOCK GROSS MARGIN (LGM)
INDEMNITY CALCULATIONS
Edit Description

Tag

No.
Internal

Picture
9(05)

Rounding
whole number

Description
Target Marketings for Eighth Month
reported on premium for cattle. Not
applicable for swine.

19

(+/-)
9999.9999

per ADM

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

TARGET
MARKET 9

Internal

9(05)

whole number

Target Marketings for Ninth Month
reported on premium for cattle. Not
applicable for swine.

20

(+/-)
9999.9999

per ADM

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

TARGET
MARKET 10

Internal

9(05)

whole number

Target Marketings for Tenth Month
reported on premium for cattle. Not
applicable for swine.

21

(+/-)
9999.9999

per ADM

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

TARGET
MARKET 11

Internal

9(05)

whole number

Target Marketings for Eleventh Month
reported on premium for cattle. Not
applicable for swine.

22

(+/-)
9999.9999

per ADM

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

23

9(10)

whole number

Sum of (Target Marketings by month
times Actual Gross Margin by month) for
the insurance period.

12

9(05)

whole number

Total of Actual Marketings for insurance
period.

TOT TARGET
MARKET

Internal

9(05)

whole number

Total of Target Marketings for insurance
period reported on premium.

TARGET
MARKET 8

FCIC-APPENDIX III

140-3 - 3

RY 2008

June 28, 2007

Exhibit 140-3

FCIC-Appendix III

LIVESTOCK GROSS MARGIN (LGM)
INDEMNITY CALCULATIONS
Edit Description

Tag

No.
Internal

Picture
9.999

Rounding
3 decimal places

Description
Result of (Total Actual Marketings
divided by Total Target Marketings) if
less than .750, else default to 1.000.

GROSS MARGIN
GUAR

Internal

9(10)

whole number

Gross Margin Guarantee for insurance
period reported on premium.

25

9(10)

whole number

Indemnity must be greater than zero
and the result of (Gross Margin
Guarantee – Total Gross Margin)
times Market Factor.

26

9.999

3 decimal places

Indemnity Reduction factor is the
result of (1.000 – Market Factor).

MARKET FACTOR

Note: An indemnity is calculated and payable if Total Gross Margin is less than Gross Margin Guarantee.

FCIC-APPENDIX III

140-3 - 4

RY 2008