For years, dairy and livestock producers using federal crop insurance had to make a choice: pick one program per period and stick with it. Starting with Reinsurance Year (RY) 2027, that limitation goes away, opening the door to more flexible, layered risk management strategies.
The Old Rule: One Program Per Period
Previously, DRP and LGM-Dairy could not be used concurrently for the same coverage period. Neither could LRP and LGM-Cattle. If a producer had any coverage in place under one program, even if it didn’t fully cover their production, they were blocked from purchasing overlapping coverage through the paired program.
For example: if you had layered in some DRP coverage for Q2 2026, you could not also purchase LGM-Dairy coverage in April for that same period, even if a coverage gap existed. The intent was to prevent double-dipping on indemnity payments, but in practice, it left producers unable to fill legitimate coverage gaps using the tools available to them.
What Changes in RY2027
Starting with coverage purchased after July 1, 2026, producers may hold concurrent coverage under both DRP and LGM-Dairy, or both LRP and LGM-Cattle, for overlapping periods, as long as they meet certain criteria. Here’s how it works:
-
Same AIP required: Both policies must be held with the same Approved Insurance Provider (AIP) to be eligible for concurrent coverage.
-
Aggregate coverage is what counts: Policies will no longer be evaluated independently for production limits. Instead, the combined insured production across both programs is compared against what the producer actually produced or marketed.
-
No collecting beyond actual production: Producers can layer the two programs, but indemnities cannot be collected on more production than actually existed. If the combined coverage across both policies exceeds a producer’s production limits, any indemnity payment will be prorated while the full premium will still be charged, just as it would be under a single policy. The rule prevents over-insurance while still allowing producers to use both tools.
-
Effective date: The rule change only applies to coverage purchased after July 1, 2026. Any coverage purchased before that date is still subject to the old rules, meaning a producer cannot add a second program for that same period. For example, if a producer secures Q4 2026 DRP coverage on June 1, 2026, they would not be allowed to also purchase LGM-Dairy December coverage. However, if that same DRP coverage was purchased on July 1, 2026 or later, purchasing LGM-Dairy December coverage alongside it would be permitted.
Why It Matters
This change treats DRP and LGM — or LRP and LGM — as complementary tools rather than competing ones. A producer who has already purchased some DRP or LRP coverage but wants additional protection through LGM is no longer penalized for trying to close a gap. As long as the combined insured amount does not exceed actual marketings, layering is now permitted.
This change allows producers to build more complete coverage for a given period. Rather than being forced to leave a gap or pick one program over another, producers can now combine the two to better protect their operation, as long as the appropriate guardrails are followed.
These changes take effect for coverage purchased after July 1, 2026. Contact HighGround today to discuss how concurrent coverage options may apply to your operation. For a side-by-side look at all the RY2027 changes, download our one-page cheat sheet covering DRP, LRP, and LGM.
