Crop Revenue Coverage | CRC

 

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ABOUT CRC

Crop Revenue Coverage (CRC) offers comprehensive protection through a dollar guarantee.  CRC also provides prevented planting and replant coverage.

 

CRC COVERAGE

CRC covers weather-related causes of loss, price fluctuations, and certain other unavoidable perils.

 

VALUE OF PRODUCTION

The value of production is the harvested production, plus any appraisals, multiplied by the harvest price.  The price at which the crop is sold does not affect the indemnity payment.

     

DOLLAR GUARANTEE

The CRC dollar guarantee is the approved historical yield (APH) multiplied by the selected level of coverage (50-85% in increments of 5%), insured acreage, and higher of the base or harvest price.  The harvest price is limited to 200% of the base price.  There is no downward price limit.

 

LOSS PAYMENT

To determine a loss payment, subtract the value of production from the dollar guarantee and multiply by the ownership share.

 

UNITS

  • A Basic Unit is all acreage of the crop in the county which the policyholder has 100% ownership or shares with the same person.

  • Optional Units are divisions by sections or section equivalents (AR, LA, and MS units are only available by FSN), by irrigated or non-irrigated practices, and by acreage grown under an organic farming practice.

  • An Enterprise Unit is all insurable acreage of the insured crop in the county, regardless of interest or persons sharing.

 

BENEFITS OF CRC

  • CRC fosters greater grower confidence to do pre-harvest crop sales to improve profits.

  • It protects growers who need a specific amount of production to feed livestock.

  • CRC loss payments track more closely with economic results.

  • CRC coverage may be viewed more favorably as loan collateral in comparison to other plans of coverage.

  • USDA shares in the premium.

 

HOW IT WORKS (Corn Illustration)

                        Assumptions:

                                     Approved yield:  140 Bu./A.

                                     Level of Coverage:  80%

                                     Interest:  100%

                                     Acres:  100          

 

 

"Harvest Price" is lower than the "Base Price"

 

                                                                                                                          Base Price

         Dollar Guarantee                             140 Bu./A. X 80% X 100A.                      @ $4.50/Bu. = $50,400  

         Value pf Production                                75 Bu./A. X 100A.                           @ $4.00/Bu. = $30,000

         Loss Payment (indemnity)                Assume 100% ownership                                          = $20,400

 

(Assume a harvest price of $4.00)

 

 

"Harvest Price" is higher than the "Base Price"

 

                                                                                        Base Price                      Harvest Price

         Dollar Guarantee               140 Bu./A. X 80% X 100A.    @ $4.50/Bu. = $50,400     @ $5.50/Bu. = $61,600

         Value pf Production                 75 Bu./A. X 100A.                                                @ $5.50/Bu. = $41,250

         Loss Payment (indemnity)    Assume 100% ownership                                                            = $20,350

 

(Assume base price of $4.50 to determine premium.  The higher Harvest Price increases coverage based on $5.50.)

 

 

"Harvest Price" is higher than 200% of the "Base Price"

 

                                                                                         Base Price                     Harvest Price

         Dollar Guarantee               140 Bu./A. X 80% X 100A.    @ $4.50/Bu. = $50,400     @ $9.00*/Bu. = $100,800

         Value pf Production                 75 Bu./A. X 100A.                                                @ $9.00*/Bu. = $67,500

         Loss Payment (indemnity)    Assume 100% ownership                                                           = $33,300

 

(Assume a harvest price of $9.25 [greater than 200% limit of $4.50 base price].)

(*Price is limited to $9.00 due to the 200% price limit.)