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REVENUE ASSURANCE
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Primary Benefits of RA
- Fosters greater groer confidence to do pre-harvest crop sales to improve profits
- Protects growers who need a specific amount of production to feed livestock
- Loss payments more closely track economic results
- May be viewed more favorably as loan collateral
- Rewards the more business-like grower
Protection Strategies
Numerous benefits, including the opportunity to implement a variety of marketing strategies, result from a well-balanced insurance portfolio. Growers can maximize their profits in good years and benefit from a predetermined minimum cash flow in bad years by using a combination of Crop Hail and RA insurance.
Improve Profits in Good Years
Knowing there is guaranteed revenue protectin give confidence to be a more aggressive marketer.
Stabilize Long-Term Business Plans
Keeping long-term financial plans on track increases credibility and credit worthiness at the bank.
Improve Financial Management
A tailored crop insurance protection program that meets the individual risk management needs can become an integral part of the farm's financial management program.
Provide a Cash Flow Safety Net
Avoid he need for an emergenecy line of credit ina bad year.
Minimize Liens on Assets
Many lenders will agree to use crop insurance as collateral for operating loans. This allows keeping other assets (machinery, real estate) free and clear.
Manage Increased Risk Exposures
Farm programs are shrinking. Reduce production risk with crop isnurance protection.
Avoid Family Financial Interruptions
Good risk managment can help insulate a family's lifestyle and prevent it from changing due to crop losses.
Strengthen the Local Economy
When growers' income is stabilized in a bad crop year, the economy of the rural community is strengthened.
Gain Peace of Mind
It's priceless.
Units
• Basic unit—all acreage of the crop in the county which the policyholder has 100% ownership or shares with the same person
• Optional units—division by acreage in separate sections with discernible breaks in the planting pattern
• Growers can also choose a county crop enterprise unit or a whole farm unit which may qualify for a reduced premium rate
Calculate a Loss Payment
Subtract value of production from the dollar guarantee and multiply by the ownership share
For more information, see USDA Risk Managment Agency.
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WCE = Winnipeg Commodity Exchange
CBOT = Chicago Board of Trade
MGE - Minneapolis Grain Exchange
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Crop
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Projected Harvest Price |
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Fall Harvest Price |
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Corn |
Feb. average for CBOT Dec. corn
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Canola/Rapeseed |
Feb. average for WCE Nov. canola converted from Canadian dollars/metric ton to US dollars/pound
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Sept. average for WCE Nov. canola converted from Canadian dollars/metric ton to US dollars/pounds
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Feed Barley |
Feb. average for WCE Oct. feed barley converted from Canadian dollars/metric ton to US dollars/Bu.
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Aug. average for WCE Oct. feed barley converted from Canadian dollars/metric ton to US dollars/Bu. |
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Soybeans |
Feb. average for CBOT Nov. soybeans
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Spring Wheat* |
Feb. average or MGE Sept. hard red spring wheat
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Aug. average for MGE Sept. hard red spring wheat |
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Sunflowers |
Feb. average for CBOT Oct. soybean oil divided by two, then subtract one
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Sept. average for CBOT Oct. soybean oil divided by two, then subtract one |
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*Durum wheat can be insured as hard red spring wheat
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