Revenue Protection (RP)
These policies insure producers against yield losses due to natural causes such as drought, excessive moisture, hail, wind, frost, insects, disease, & revenue losses caused by a change in the harvest price from the projected price.
The producer selects the amount of average yield he or she wishes to insure; from 55-85 percent.
The projected price and the harvest price are 100 percent of the amounts determined in accordance with the Commodity Exchange Price Provisions & are based on daily settlement prices for certain futures contracts. The amount of insurance protection is based on the greater of the projected price or the harvest price. If the harvested plus any appraised production multiplied by the harvest price is less than the amount of insurance protection, the producer is paid an indemnity based on the difference.
Actual Production History (APH)
This is the traditional plan that some producers have. A producer reports his past yields and is given a production guarantee based on his history for each “unit”. Losses are paid based on the “market price” set each year by the USDA.
LRP is an insurance program offered to producers of fed cattle, feeder cattle, sheep, and hogs. LRP provides protection from decreases in livestock selling prices while enabling producers to benefit from an increase in market prices. A user of LRP first selects an end date for the insurance policy that is close to the expected marketing date for the livestock and then selects a coverage price level to insure. If, on the end date of the policy, the regional/national cash price average (not the producer’s cash price) is below the insured coverage price, the LRP insurance pays an indemnity to make up the difference.
PRF is a risk management program offered to farmers & ranchers who rely on pasture, rangeland or forage acreage for haying & grazing.
PRF: Rainfall Index
The PRF rainfall index program is based on rainfall indices to provide livestock producers the ability to purchase protection for losses of forage produced for grazing or harvested for hay.
The rainfall index is based on National Oceanic & Atmospheric Administration data & uses an approximate 17 x 17 mile grid. Producers must select at least two, 2-month time periods in which precipitation is important during the growth & production of the forage species. These time periods are called index intervals. Insurance payments to the producer suffering a loss are calculated based on the deviation from normal precipitation with the grid & index interval(s) selected. This insurance coverage is for a single peril - lack of precipitation. Coverage is based on the experience of the entire grid. It is not based on individual farms or ranches or specific weather stations in the general area.
Full Coverage Plans
A policy that gives the insured a payment that equals the percent of loss multiplied by the insured value per acre.
Stand Alone Coverage
Basic: 0% deductible pays @ 1% payable loss
DDA: 10% deductible disappears @ 25% payable loss
DDB: 20% deductible disappears @ 40% payable loss
DDC: 30% deductible disappears @ 55% payable loss
A policy in which a 10% deductible and full
coverage policy are built into one. One-half the coverage will be at full and one-half the coverage will be at the 10% deductible. At 50%, the deductible disappears and the policy becomes
DXS55% deductible - (Loss% - 5% X 1.25)
DXS1010% deductible - (Loss% - 10% X 1.25)
Crop Hail Production Plans (CHPP)In conjunction with your MPCI policy, the CHPP issued to cover actual production deficiencies due to a hailstorm or other named peril. Plans are available in some areas to enable you to cover your Actual Production History (APH) even after application of any deductible. After a qualifying peril has occurred, damage to the unit is assessed - with final adjustment deferred until after harvest. After harvest, the actual production deficiency for the MPCI unit (not by acre)that can be attributed to hail damage is used to calculate the loss under the Production Plan. Production deficiencies may also lead to indemnities from the underlying MPCI policy and plan.
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