About RA

Revenue Assurance (RA) offers comprehensive protection through a dollar guarantee. RA also provides prevented planting and replant coverage. (These coverages are available for wheat only in counties with both fall and spring final planting dates and counties with spring only final planting dates. Cotton has no replant coverage.) The Winter Wheat Coverage Endorsement is available in counties with both fall and spring final planting dates.

RA Coverage

RA covers weather-related causes of loss, low prices, and certain other unavoidable causes of loss.

Dollar Guarantee

The RA dollar guarantee is the historical yield multiplied by the level of coverage (65% to 85%, in increments of 5%), insured acreage, and the projected harvest price. A Fall Harvest Price Option, which provides increased protection if the fall harvest price is higher than the projected harvest price, is available. 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.

Value of Production

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

Units

• A Basic Unit is all acreage of the crop in the county in 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.
• A Whole Farm Unit is all insurable acreage of two or more insured crops in the county, regardless of interest or persons sharing. All crops that are planted, and for which the whole farm unit structure is available, must be included in the whole farm unit.

Loss Payment

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

Benefits of RA

• RA fosters greater grower confidence to do pre-harvest crop sales to improve profits.
• RA protects growers who need a specific amount of production to feed livestock.
• RA loss payments track more closely with economic results.
• RA coverage may be viewed more favorably as loan collateral.
• An RA policy rewards the more businesslike grower.
  

How It Works for Corn1

		“Fall Harvest Price” is lower than the “Projected Harvest Price”
Dollar Guarantee...........	150 Bu./A. × 75% 100A. ...........	@ $4.00/Bu. =	$45,000
Value of Production......	50 Bu./A. x 100A .......................	@ $3.50/Bu. =	$17,500
Loss Payment...............	Assume 100% ownership share	.......................	$27,500

		“Projected Harvest Price” is lower than the “Fall Harvest Price”
Dollar Guarantee...........	150 Bu./A. × 75% 100A. ...........	@ $4.50/Bu.2 =	$50,625
Value of Production......	50 Bu./A. x 100A .......................	@ $4.50/Bu.2 =	$22,500
Loss Payment...............	Assume 100% ownership share	.......................	$28,125

1Illustration assumes the Fall Harvest Price Option was elected 2High fall harvest price measures coverage based on $4.50/Bu.

Availability and Prices

Crop	State	Projected Price	Harvest Price	Board/Exchange
Barley Malting barley price and quality endorsement available in some areas	CO, ID, MN, MT, ND, OR, SD, WA	February average for WCE October feed barley converted from Canadian dollars/metric ton to U.S. dollars/bushel	August average for WCE October feed barley converted from Canadian dollars/metric ton to U.S. dollars/bushel	Winnipeg Commodity Exchange
Corn	AR, LA, NC	First 10 trading days of February average for CBOT December corn	November average for CBOT December corn	Chicago Board of Trade
	CO, IL, IN, IA, KS, KY, MI, MN, MO, NE, ND, OH, OK, SD, TN, VA	February average for CBOT December corn
Cotton	AR, AZ, LA, NM, OK	January 15 to February 14 average for NYCE December cotton	November average for NYCE December cotton	New York Cotton Exchange
Canola/ Rapeseed	ID, MN, MT, ND, OR, WA	February average for WCE November canola converted from Canadian dollars/metric ton to U.S. dollars/pound	September average for WCE November canola converted from Canadian dollars/metric ton to U.S. dollars/pound	Winnipeg Commodity Exchange
Rice	AR, LA	January average for CBOT November rough rice	October average for CBOT November rough rice	Chicago Board of Trade
Soybeans	AR, LA, NC	First 10 trading days of February average for CBOT November soybeans	October average for CBOT November soybeans	Chicago Board of Trade
	CO, IL, IN, IA, KS, KY, MI, MN, MO, NE, ND, OH, OK, SD, TN, VA	February average for CBOT November soybeans
Spring Wheat3	CO, IA, ID, MN, MT, ND, SD	February average for MGE September hard red spring wheat	August average for MGE September hard red spring wheat	Minneapolis Grain Exchange
Sunflowers	CO, KS, MN, MT, NE, ND, SD, TX, WY	February average for CBOT December soybean oil divided by two, then add one and average for the month for oil type4	October average for CBOT December soybean oil divided by two, then add one and average for the month for oil type 4	Chicago Board of Trade
Winter Wheat	AR, CO, IA, KS, MO, MT, NE, OK, SD	August 15 to September 14 pre-harvest year average for KCBOT July hard red winter wheat	July 1 to July 14 average for the KCBOT July hard red winter wheat	Kansas City Board of Trade
	ID, IN, KY, MI, OH, TN	August 15 to September 14 pre-harvest year average for CBOT July soft red winter wheat	July 1 to July 14 average for the CBOT July soft red winter wheat	Chicago Board of Trade

3Durum and Khorasan wheat can be insured as hard red spring wheat 4 For confectionery type, oil type price is adjusted based on the difference between the USDA estimate in January of the confectionery season average price and the oil season average price.

Note: This summary is for general illustration only. See policy for program details.

4/13/10