Coverages

Coverages | RA | What is RA?

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What Is It? What Are Its Benefits?

This program provides comprehensive protection through a dollar guarantee. Coverage levels are available from 65-85% in increments of 5%1 of the Actual Production History (APH) times the projected price. The perils covered are weather related causes of loss, certain other unavoidable perils, and price fluctuations. RA provides prevented planting protection. Replanting and Winter Wheat Coverage Endorsement are provided for wheat in counties with both spring and fall planting dates2.

Dollar Guarantee

The dollar guarantee for the insurance unit is the historical yield (APH), times level of coverage, times the insured acreage, times the ownership share, times the projected harvest price. A "Fall Harvest Price Option" is available which provides increased protection if the near harvest price (fall harvest price) is higher than the projected harvest price (similar to CRC). The harvest price is limited to a 200% increase over the base price. There is no downward price limit.

Value of Production

To determine the value of production, multiply the harvested production, plus any appraisals, by the ownership share and the fall harvest price. The price at which the crop is sold does not affect the indemnity 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), 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 can also choose a county crop enterprise unit or a whole farm unit at a reduced premium rate.

How It Works (wheat illustration3)

1
"Fall Harvest Price" is lower than the "Projected Harvest Price"—

Dollar Guarantee	120 Bu./A. × 75% × 100 A.	@ $2.50/Bu. = $22,500

Value of Production	25 Bu./A. × 100 A.	@ $2.00/Bu. = $ 5,000

Loss Payment (indemnity)	Assume 100% ownership	= $17,500

2
“Projected Harvest Price” is lower than the “Fall Harvest Price”—

Dollar Guarantee	120 Bu./A. × 75% x1000 A.	@ $2.75/Bu⁴ = $24,750

Value of Production	25 Bu./A. × 1000 A.	@ $2.75/Bu. = $ 6,875

Loss Payment (indemnity)	Assume 100% ownership	= $17,875

Benefits

Fosters greater grower 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.

Availability and Prices

Crop	Availability	Projected Harvest Price	Fall Harvest Price	Board/Exchange
Corn	AR, LA, NC	First 10 trading days of Feb. average for CBOT Dec. corn	Nov. average for CBOT Dec. corn	Chicago Board of Trade

	CO, IL, IN, IA, KS, KY, MI, MN, MO, ND, NE, OH, OK, SD, TN, VA	Feb. avg. for CBOT Dec. corn

Cotton	AR, AZ, LA, NM, OK	Jan. 15 to Feb. 14 avg. for NYCE Dec. cotton	Nov. avg. for NYCE Dec. cotton	New York Cotton Exchange

Canola/ Rapeseed	ID, MN, ND	Feb. avg. for WCE Nov. canola converted from Canadian dollars/metric ton to U.S. dollars/pound	Sept. avg. for WCE Nov. canola converted from Canadian dollars/metric ton to U.S. dollars/pound	Winnipeg Commodity Exchange

Feed Barley	CO⁵, ID⁵, MN⁵, MT⁵, ND, SD⁵	Feb. avg. for WCE Oct. feed barley converted from Canadian dollars/metric ton to U.S. dollars/bushel	Aug. average for WCE Oct. feed barley converted from Canadian dollars/metric ton to U.S. dollars/bushel	Winnipeg Commodity Exchange

Rice	AR, LA	Jan. avg. for CBOT Nov. rough rice	Oct. avg. for CBOT Nov. rough rice	Chicago Board of Trade

Soybeans	AR, LA, NC	First 10 trading days of Feb. average for CBOT Nov. soybeans	Oct. average for CBOT Nov. soybeans	Chicago Board of Trade

	CO, IL, IN, IA, KS, KY, MI, MN, MO, ND, NE, OH, OK, SD, TN, VA	Feb. avg. for CBOT Nov. soybeans

Spring Wheat⁶	CO, IA, ID, MN, MT, ND, SD	Feb. avg. for MGE Sept. hard red spring wheat	Aug. average for MGE Sept. hard red spring wheat	Minneapolis Grain Exch.

Sunflowers	CO, KS, MN, MT, ND, SD	Feb. avg. for CBOT Oct. soybean oil divided by two, then subtract one	Sept. average for CBOT Oct. soybean oil divided by two, then subtract one	Chicago Board of Trade

Winter Wheat	AR, CO, IA, KS, MO, MT, NE, OK, SD	Aug. 15 to Sept. 14 preharvest year avg. for KCBT July hard red winter wheat	July 1 to July 14 avg. for the KCOBT July hard red winter wheat	Kansas City Board of Trade

Winter Wheat	IID, IN, KY, MI, OH, TN	Aug. 15 to Sept. 14 preharvest year avg. for CBOT July soft red winter wheat	July 1 to July 14 avg. for CBOT July soft red winter wheat	Chicago Board of Trade

¹ 80 and 85% levels available in limited areas; ²Cotton has no replant coverage; ³Illustration assumes the "Fall Harvest Price Option" was elected; ⁴ HIgher Fall Harvest price increases coverage based on $2.75/Bu.; ⁵ A malting barley price and quality endorsement is available; ⁶ Durum and Khorasan wheat can be insured as hard red spring wheat.

02/04, 11/04, 03/05, 12/05, 08/01/08

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