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Crop Insurance

Crop Revenue Coverage - CRC

This is becoming the most popular form of federally reinsured crop insurance. It combines a minimum yield guarantee AND a minimum revenue guarantee. This protects your cash flow from a loss of bushels or a loss of revenue due to falling prices. You choose a level of your average yield, between 50% and 85% as your minimum yield guarantee. Based on CBOT futures market prices, CRC sets a Base Price in February, and a Harvest Price in October for soybeans, and in November for corn. CRC will protect your minimum yield at the higher of these two prices. No other insurance plan does this. With falling prices, you have more bushels protected. With rising prices, your revenue guarantee goes up, with no additional premium.

Because CRC protects your guaranteed bushels at the higher of Base or Harvest price, it essentially provides REPLACEMENT value coverage. This allows you to forward price more grain when marketing opportunities are available between late winter and summer.

CRC will pay the higher Harvest Price up to $1.50/bu more for corn and $3.00/bu for soybeans over the Base Prices set in February. This REPLACEMENT feature may allow you to earn truly profitable prices for your grain by forward pricing with greater confidence than ever before. CRC includes replant and prevented planting coverage also.

CRC costs more, but does more than other coverage. Premium costs can be reduced by using basic or enterprise unit discounts. See your FCS crop insurance specialist for details.

Multiple Peril Crop Insurance - MPCI

MPCI is the "original" form of federally reinsured crop insurance. You pick a level from 50% to 85% of your average yield, and MPCI guarantees that yield. If you have yield losses, you receive a set price per bushel ($2.05 for corn and $5.26 for soybeans in 2001).

MPCI covers replant costs and prevented planting situations also. Less expensive than CRC, MPCI is a good way to protect your cash flow or input costs against weather-related yield losses.

Income Protection – IP

IP provides a fixed revenue guarantee based on the same prices used with CRC. It does not, however, provide a minimum bushel guarantee. It protects on a limited level basis, up to 75% of your yield, against falling prices at harvest. Because it does not provide the benefit of the higher replacement coverage like CRC, it is one of the lowest cost coverage forms available. Unit structure is limited.

Revenue Assurance – RA

RA is similar to IP, but allows a full range of unit structure similar to CRC. RA even allows a further discount when all crops are combined into a "whole farm" unit guarantee. A Harvest Option can be added to RA which allows it to use a possible higher harvest price as CRC does. This makes it very similar in coverage and cost to CRC.

Group Risk Plan – GRP

GRP is a bushel based plan using county averages to determine if an indemnity is paid. Various levels can be chosen, based on a county expected yield, and once county results are available (usually 4 – 6 months after harvest), losses if any are paid to GRP plan participants. Individual producers have no guarantee for their operation, and must sign a disclaimer form to that effect. Also, GRP does not cover replant or prevented planting losses. You could have a total loss, yet with the county reaching its expected level, you would receive nothing under a GRP plan. However, you may have a normal crop, and receive a GRP loss payment if the county falls below the expected level chosen. Depending on amount of protection purchased, GRP is usually similar in cost to MPCI.

Group Risk Income Protection – GRIP

GRIP is an income based plan, which performs similar to IP over the whole county. An expected revenue is set for the county on a per acre basis. Participants can purchase a larger amount of protection with GRIP than any other coverage. However, unless the county income falls below the prescribed trigger level based on the ending fall price, and county yield (determined within 4-6 months after harvest), no indemnity is paid. Like GRP, GRIP does not cover replant cost or prevented planting losses. Cost per acre for GRIP is usually higher than MPCI, and comparable to CRC depending on the amount purchased. A disclaimer form must be signed acknowledging that the individual farm operation has no guarantee for its production or revenue. GRIP may fit very large producers with above average production and minimal variance in their yields over time.

Add-On Protection

FCS is able to arrange crop insurance through different insurance companies. Some offer add-on protection which increases the revenue guarantee, or replant protection, or some other coverage enhancement. These add-on’s are usually privately reinsured and may change from one year to the next. FCS crop insurance specialists can provide you with information about these and all of the various forms of crop insurance protection for your farm operation.