Coverages
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CRC for Wheat
About CRC
Crop Revenue Coverage (CRC) offers comprehensive protection through a dollar guarantee. CRC also provides prevented planting and replant coverage (available only in counties with both spring and fall final planting dates and counties with spring only final planting dates). The Winter Wheat Coverage Endorsement is available in counties with both spring and fall planting dates.
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 Guarante
The CRC dollar guarantee is the historical yield multiplied by selected level of coverage (50% to 85%, in 5% increments), insured acreage, and base or harvest price, whichever is higher. The harvest price is limited to a 200% increase over the base price. There is no downward price limit. Coverage levels of 80% and 85% are not available in all areas.
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 of 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.
- CRC 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.
How It Works for Wheat
| "Harvest Price" is lower than the "Base Price" |
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| Dollar Guarantee........... | 40 Bu./A. x 75% x 1,000 A......... | @ $3.00/Bu. = | $90,000 |
| Value of Production...... | 25 Bu./A. x 1,000 A.................... | @ $2.85/Bu. = | $71,250 |
| Loss Payment............... | Assume 100% ownership............ | .....................= | $18,750 |
| "Base Price" is lower than the "Harvest Price" |
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| Dollar Guarantee........... | 40 Bu./A. x 75% x 1,000 A......... | @ $3.15/Bu.1 = | $94,500 |
| Value of Production...... | 25 Bu./A. x 1,000 A.................... | @ $3.15/Bu. = | $78,750 |
| Loss Payment............... | Assume 100% ownership............ | ......................= | $15,750 |
1 Assumes a base price of $3.00 to determine premium. Higher harvest price increases coverage based on $3.15/Bu.
Availability and Prices
| Crop | Availability | Base Price | Harvest Price | Board/Exchange |
| Spring Wheat | CO, MN, MT, ND, SD, WY |
Feb. avg. for MGE Sept. hard red spring wheat for Mar. 15 cancellation date | Aug. avg. for MGE Sept. hard red spring wheat for Mar. 15 cancellation date | Minneapolis Grain Exchange |
| Spring Wheat | CO, IA, MT, NE, SD, WI, WY | Aug. 15 to Sept. 14 pre-harvest year’s avg. for KCBOT July (harvest year) hard red winter wheat for Sept. 30 cancellation date | Aug. avg. for MGE Sept. hard red spring wheat for Sept. 30 cancellation date |
Kansas City Board of Trade and Minneapolis Grain Exchange |
| Winter Wheat | IL, IN, MI, OH, PA, WI | Aug. 15 to Sept. 14 pre-harvest year’s avg. for CBOT July (harvest year) soft red winter wheat | July 15 to Aug. 14 avg. for CBOT Sept. soft red winter wheat | Chicago Board of Trade |
| Winter Wheat | NY | 85% of the Aug. 15 to Sept. 14 pre-harvest year’s avg. for CBOT July (harvest year) soft red winter wheat | 85% of the July 15 to Aug. 14 harvest year’s avg. for CBOT Sept. soft red winter wheat |
Chicago Board of Trade |
| Winter Wheat | AL, AR, DE, GA, KY, LA, MD, MO, MS, NC, SC, TN, VA | Aug. 15 to Sept. 14 pre-harvest year’s avg. for CBOT (harvest year) soft red winter wheat | June avg. for CBOT July soft red winter wheat | Chicago Board of Trade |
| Winter Wheat | IA, MT, NE, SD, WY | Aug. 15 to Sept. 14 pre-harvest year’s avg. for July (harvest year) hard red winter wheat | July 15 to Aug. 14 avg. for KCBOT Sept. hard red winter wheat |
Kansas City Board of Trade |
| Winter Wheat | AZ, CA, CO, KS, NM, OK, TX | Aug. 15 to Sept. 14 pre-harvest year’s avg. for KCBOT July (harvest year) hard red winter wheat | June avg. for KCBOT July hard red winter wheat | Kansas City Board of Trade |
| Wheat | ID, NV, OR, UT, WA | Aug. 15 to Sept. 14 pre-harvest year’s avg. for CBOT Sept. (harvest year)
soft red winter wheat plus “basis” (5-yr. avg. difference between Aug. avg. nearby CBOT Sept. soft red and Aug. avg. for PME soft white contracts) |
Aug. avg. for PME soft white wheat | Chicago Board of Trade and Portland Merchants Exchange |
08/2008, 03/2010
Note: This summary is for general illustration only. See policy for program details.
