Coverages | CRC | What is CRC?

CRC for Corn, Cotton, Grain Sorghum, Rice, and Soybeans

About CRC

Crop Revenue Coverage (CRC) offers comprehensive protection through a dollar guarantee. CRC also provides prevented planting and replant coverage (replant coverage excludes cotton).

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 Guarantee

The CRC dollar guarantee is the approved historical yield (APH) multiplied by the 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 200% of 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 (Corn Illustration)

Assumptions
Approved yield: 140 Bu./A.
Level of Coverage: 75%
Interest: 100%
Acres: 100

1. “Harvest price” is lower than the “base price”

   		Base Price
   Dollar Guarantee	140 Bu./A. x 75% x 100A.	@ $4.50/Bu. = $47,250
   Value of Production	75 Bu./A. x 100A.	@ $4.00/Bu. = $30,000
   Loss Payment (indemnity)	Assume 100% ownership	= $17,250

   Assume a harvest price of $4.00.
   
   
2. “Harvest price” is higher than the “base price”
   

   		Harvest Price	Harvest Price
   Dollar Guarantee	140 Bu./A. x 75% x 100A.	@ $4.50/Bu. = $47,250	@ $5.50/Bu. = $57,750
   Value of Production	75 Bu./A. x 100A.		@ $5.50/Bu. = $41,250
   Loss Payment (indemnity)	Assume 100% ownership		= $16,500

   Assume base price of $4.50 to determine premium. The higher harvest price increases coverage based on $5.50/Bu.
   
   
3. “Harvest price” is higher than 200% of the “base price”

   		Base Price	Harvest Price
   Dollar Guarantee	140 Bu./A. x 75% x 100A.	@ $4.50/Bu. = $47,250	@ $9.00*/Bu. = $94,500
   Value of Production	75 Bu./A. x 100A.		@ $9.00*/Bu. = $67,500
   Loss Payment (indemnity)	Assume 100% ownership		= $27,000

   Assume a harvest price of $9.25 (greater than 200% limit of $4.50 base price).
   *Price is limited to $9.00 due to the 200% price limit.

Crop	Availability	Base Price	Harvest Price
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, and WY	Feb. average for Dec. CBOT corn for Mar. 15 CD; Dec. 15 -Jan. 14 average for Sept. CBOT corn if CD is before Mar. 15	Oct. average for Dec. CBOT corn for Mar. 15 CD; Aug. average for Sept. CBOT corn if CD is before Mar. 15 (CBOT)
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, and WV	Feb. average for Nov. CBOT soybeans for Mar. 15 CD; Dec 15 - Jan. 14 average for Sept. CBOT soybeans if CD is before Mar. 15	Oct. average for Nov. CBOT soybeans for Mar. 15 CD; Aug. average for Sept. CBOT soybeans if CD is before Mar. 15 (CBOT)
Cotton	AL, AR, AZ, CA, FL, GA, KS, LA, MO, MS, NC, NM, OK, SC, TN, TX, and VA	Jan. 15 -Feb. 14 average for Dec. NYCE cotton for Feb. 28 and Mar. 15 CD; Dec 15 -Jan. 14 average for Oct. NYCE cotton for Jan. 31 CD	Nov. average for Dec. NYCE cotton for Feb. 28 and Mar. 15 CD; Sept. average for Oct. NYCE cotton for Jan. 31 CD (NYCE)
Grain Sorghum	AL, AR, CA, CO, DE, FL, GA, IA, IL, IN, KS, KY, LA, MD, MI, MN, MO, MS, NC, ND, NE, NJ, NM, OH, OK, PA, SC, SD, TN, TX, VA, and WI	Percentage relationship between USDA Jan. price estimates for grain sorghum and corn times the Feb. average for Dec. CBOT corn for Mar. 15 CD; Dec. 15 -Jan. 14 average 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. average for Dec. CBOT corn for Mar. 15 CD; Aug. average for Sept. CBOT corn if CD is before Mar. 15 (CBOT)
Rice	AR, CA, FL, LA, MO, MS, OK, TN, and TX	Dec. 15 -Jan. 14 average for Sept. CBOT rice for Jan. 31 CD Jan. 1 -Jan. 31 average for Nov. CBOT rice for Feb. 28 CD	Aug. average for Sept. CBOT rice for Jan. 31 CD; Oct. average for Nov. CBOT rice for Feb. 15 and 28 CD (CBOT)

CBOT = Chicago Board of Trade NYCE = New York Cotton Exchange CD = Cancellation Date

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

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