The policy indemnifies the insured if the production for the unit is less than the Production Guarantee. Both the Production Guarantee and the Production to Count (production harvested or appraised) are based upon 100% of the Approved Actual Production History (APH) and 100% of the production harvested. The producer’s share of the crop is not taken into account until the total indemnity has been calculated.
|Approved APH||Coverage Level||Established Price||Price Election||Acres||Share||Final Production to Count|
Value of Production Guarantee
100 x 85% x $3 x 100% x 200 = $51,000
Value of Production to Count
14,000 x $3 x 100% x = $42,000
$51,000 - $42,000 = $9,000 x 50% share = $4,500