Crop Insurance
 

Revenue Protection

  • Individual, Revenue Protection
  • Downside Price and Yield Protection and Upside Price and Yield Protection.
  • Available protection  levels-65% to 85% of APH (Actual Production History)
  • Loss payments paid when actual revenue is less than revenue guarantee
  • Insurable units: basic, optional, enterprise and whole farm units
  • Cost varies by crop, county, state, practice, options and coverage level
  • Individual APH required
  • Replant included
  • Prevented planting included, buy up available
  • Use revenue guarantee to protect aggressive pre-harvest marketing strategy
 

Base Price figured by taking the simple average of the December Chicago Mercantile Exchange (CME) futures contract during the month of February (corn-beans based on Nov. contract)

Higher of Base Price and Harvest Price is used to determine indemnity i.e. this is how this policy protects from low prices. (Not the case with Harvest Price Exclusion (HPE)).


 

Yield Protection

  • Individual Yield protection
  • Available protection levels-50% to 85% of APH
  • Loss payments made when actual yield is less than guarantee
  • Insurable units: basic, optional, and enterprise units
  • Cost varies by crop, county, state, practice, options and coverage level
  • Individual APH required
  • Replant included
  • Prevented planting included, buy up available
  • Covers bushels loss up to 85% of APH, does not offer upside price protection
 
Base price set by Commodity Exchange Price Provisions (CEPP)
 

Catastrophic Coverage (CAT)

  • Individual, Production Risk
  • Loss Coverage on Catastrophic Losses
  • 50% of APH 
  • Loss payments made when actual yield is less than guarantee
  • Insurable units: basic
  • Individual APH required
  • Prevented planting included
  • Covers bushels loss only, up to 50% of APH
  • Pays 55% of market price, no upside price protection

 

Area Risk Protection Insurance (ARPI)

ARPI is revenue insurance paying indemnities when county revenue is below a revenue guarantee. ARPI has two options: ARP with harvest price exclusion has a guarantee that will not increase while ARP has a guarantee that will increase if the harvest price is above the base price.

AYP coverage provides protection against widespread loss of production of the insured crop in a county.. Producers choose one coverage level (70%, 75%, 80%, 85%, or 90%) for each crop and county combination. The insured is eligible for payment if the county average yield, as determined by the USDA National Agricultural Statistics Service (NASS), falls below the “trigger yield” as a percentage of the expected county yield.

ARP is based on the county average yield, and is designed to protect against widespread loss of revenue due to low county yields or crop prices based on a group or area concept. It does not protect individual producer revenues. “Area” crop revenues per acre are generally less volatile than individual farm revenues per acre. Premium rates will depend on the coverage level, yield volatility, and the price volatility.