Crop Insurance Product
Crop Revenue Coverage (CRC)
Crop Revenue Coverage (CRC) was the first revenue type of coverage to be offered to farmers. Many products are patterned after CRC. To better understand your options, it is necessary to understand some definitions.
APH (Actual Production History) - The yield information for previous years, including planted acreage and harvested production, used to determine your yield for insurance purposes.
Levels of Coverage - 50% to 85% in 5% increments.
Spring Price - 100% of the average closing price of the December Futures Contract of the Chicago Board of Trade (CBOT) during the month of February for corn. For soybeans, it is 100% of the average closing price for November Futures Contract on the CBOT during the month of February.
Harvest Price - 100% of the average closing price during October for the December CBOT Corn Contract. For Soybeans, 100% of the average closing price during October for the November CBOT.
Does cost vary from agent to agent?
No. Federal Crop Insurance Corporation (FCIC) sets the rates. However, different approved yields or levels of coverage selected will affect your cost per acre.
CRC Example 1:
Crop: Corn Level of Coverage: 80%
Unit: Basic Spring Price: $2.32
Acres: 100 Fall Price: $2.00
APH: 150 Harvest per acre: 130 bushel
150 bu. x 80% = 120 bu. x $2.32 = $278 minimum guarantee
130 harvested bu. x $2.00 = $260 revenue to count
$278 - $260 = $18 per acre award x 100 acres = $1,800 loss award
CRC Example 2:
Crop: Corn Level of Coverage: 85%
Unit: Optional Spring Price: $2.32
Acres: 100 Fall Price: $2.80
APH: 160 Harvest per acre: 100 bushel
160 bu. x 85% = 136 bu. x $2.32 = $316 minimum guarantee per acre
160 bu. x 85% = 136 bu. x $2.80 = $381 new guarantee per acre
If the harvest price increases in the fall so does the revenue guarantee. This is only available for CRC and RA (HPO). It is not available on basic RA or IP revenue policies.
160 bu. x 85% = 136 bu. x $2.80 = $381 new revenue guarantee
100 bu. x $2.80 = $280 revenue to count
$381 - $280 = $101 per acre x 100 acres = $10,100 loss award
These examples are only intended to demonstrate the basic workings of CRC.
Additional coverages of this policy:
Late Planting coverage - provides additional time to plant crops when conditions prevent timely planting.
Prevented Planting - allows for payments, when due to insurable causes of loss, you are prevented from planting your crops.
Replant provisions - when acreage qualifies, an additional payment for the extra expenses when replanting is necessary.
Quality coverage - provides coverage when crop's test weight, or grade drops below a certain level.
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