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CRC for Corn, Cotton, Grain Sorghum, Soybeans, and Rice
What Is It? What Are Its Benefits?
This program provides comprehensive protection for corn, cotton, grain sorghum, soybeans, and rice through a dollar guarantee. Additional protection is provided if the near harvest futures price (harvest price) exceeds the base price.
The perils covered are weather related, certain other unavoidable causes of loss, and price fluctuations. CRC provides prevented planting and replanting protection (available only in counties with both fall and spring final planting dates and counties with spring only final planting dates). Prevented planting payments are determined by using the higher of the base or harvest price. The base price is used for replanting payments.
Dollar Guarantee
The guarantee is the approved historical yield (APH) multiplied by the selected level of coverage (50-85% in increments of 5%; 80 and 85% levels available in limited areas) the insured acreage, and the higher of the base or harvest price. The harvest price is limited to a 200% increase over the base price. There is no downward price limit.
Value of Production
The value of production to count is the actual yield plus any appraisals multiplied by the harvest price. The price at which the crop is sold does not affect the loss payment.
Loss Payment
To calculate a payable loss, subtract the value of production from the dollar guarantee and multiply by the ownership share.
Units
- The basic insurance unit is all the acreage of the crop in the county in which the policyholder has 100% ownership or shares with the same person. Most basic insurance units can be further divided into optional units.
- Optional units may be divided by sections or section equivalents (in areas without sections or section equivalents, separate farm serial numbers (FSN) may be used), and by irrigated or non-irrigated practices, and by acreage grown under an organic farming practice. In AR, LA, and MS, units are only available by FSN. To qualify, a producer must have individual records for each unit and the planting pattern between the units must have a discernible break.
- Growers may also choose a county, crop enterprise unit at a reduced premium rate.
How It Works (corn illustration)
| 1 | ||
| "Harvest Price" is lower than the "Base Price"— | ||
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Base Price |
| Dollar Guarantee | 120 Bu./A. × 75% 100A. | @ $2.50/Bu. = $22,500 |
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| Value of Production | 25 Bu./A. × 100A. | @ $2.00/Bu. = $ 5,000 |
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| Loss Payment (indemnity) | Assume 100% ownership | = $17,500 |
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| 2 | ||
| "Harvest Price" is higher than the "Base Price"— | ||
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Harvest Price |
| Dollar Guarantee | 120 Bu./A. × 75% 100A. | @ $2.75/Bu.1 = $24,750 |
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| Value of Production | 25 Bu./A. × 100A. | @ $2.75/Bu. = $ 6,875 |
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| Loss Payment (indemnity) | Assume 100% ownership | = $17,875 |
| 1Assumes base price of $2.50 to determine premium. The higher Harvest Price increases coverage based on $2.75/Bu. | ||
| 3 | ||
| "Base price" is lower than the "harvest price" by greater than the price limit— | ||
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Harvest Price |
| Dollar Guarantee | 120 Bu./A. × 75% 100A. | @$4.004 = 36,000 |
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| Value of Production | 25 Bu./A. × 100A. | @4.00 (Limit $1.50 move) = 10,000 |
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| Loss Payment (indemnity) | Assume 100% ownership | = $16,000 |
Benefits
- Fosters greater grower confidence to do pre-harvest crop sale 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
Availability and Prices
| Crop/Availability | |
Base Price | |
Harvest Price | |
Board/Exch |
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| Corn - AL, AR, AZ, CA, CO, CT, DE, FL, GA, IA, ID, IL, IN, KS, KY, LA, MA, MD, ME, MI, MN, MO, MS, MT, NC, ND, NE, NH, NJ, NM, NY, OH, OK, OR, PA, RI, SC, SD, TN, TX, UT, VA, VT, WA, WI, WV, WY | Feb. avg. for Dec. CBOT corn for Mar. 15 CD; Dec. 15 - Jan. 14 avg. for Sept. CBOT corn if CD is before Mar. 15. | Oct. avg. for Dec. CBOT corn for Mar. 15 CD; Aug. avg. for Sept. CBOT corn if CD is before Mar. 15 | Chicago Board of Trade | |||
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| Soybeans - AL, AR, CO, DE, FL, GA, IA, IL, IN, KS, KY, LA, MD, MI, MN, MO, MS, NC, ND, NE, NJ, NY, OH, OK, PA, SC, SD, TN, TX, VA, WI, WV | Feb avg. for Nov. CBOT soybeans for Mar. 15 CD; Dec. 15 - Jan 14 avg. for Sept. CBOT soybeans if CD is before Mar. 15. | Oct. avg. for Nov. CBOT soybeans for Mar. 15 CD; Aug. avg. for Sept. CBOT soybeans if CD is before Mar. 15 | Chicago Board of Trade | |||
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| Cotton - AL, AR, AZ, CA, FL, GA, KS, LA, MO, MS, NC, NM, OK, SC, TN, TX, VA | Jan. 15 - Feb. 14 avg. for Dec. NYCE cotton for Feb. 28 and Mar. 15 CD; Dec. 15 - Jan. 14 avg. for Oct. NYCE cotton for Jan. 31 CD. | Nov. avg. for Dec. NYCE cotton for Feb. 28 and Mar. 15 CD; Sept. avg. for Oct. NYCE cotton for Jan. 31 CD | New York Cotton Exchange | |||
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| Grain Sorghum - AL, AR, CA, CO, FL, GA, IA, IL, IN, KS, KY, LA, MD, MI, MN, MO, MS, NC, ND, NE, NM, OH, OK, SC, SD, TN, TX, VA, WI | Percentage relationship between USDA Jan. price estimates for grain sorghum and corn times the Feb. avg. for Dec. CBOT corn for Mar. 15 CD; Dec. 15 - Jan 14 avg. for Sept . CBOT corn if CD is before Mar. 15 | Percentage relationship between USDA Jan. price estimates for grain sorghum and corn times the Oct. avg. for Dec. CBOT corn for Mar. 15 CD; Aug. avg. for Sept. CBOT corn if CD is before Mar. 15 | Chicago Board of Trade | |||
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| Rice - AR, CA, FL, LA, MO, MS, OK, TN, TX | Dec. 15 - Jan. 14 avg. for Sept. CBOT rice for Jan. 31 CD | Aug. avg. for Sept. CBOT rice for Jan. 31 CD; Oct. avg. for Nov. CBOT rice for Feb. 15 and 28 CD | Chicago Board of Trade | |||
This institution is an equal opportunity provider and employer.
02/21/05, 03/05, 12/05, 08/01/08
Note: This summary is for general illustration only. See policy for program details.
