Yield Protection

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Yield Protection

YP is available for: Barley, Canola, Corn, Cotton, Dry Beans, Dry Peas, Grain Sorghum, Peanuts, Popcorn, Rice, Soybeans, Sunflowers, and Wheat

Yield Protection is very similar to the Actual Production History (APH) policy in that it insures producers against a loss in yield due to an insurable cause of loss. The main difference between the 2 policies is the price used to determine the value of the crop. APH uses a price established by RMA while YP uses a price that is established by averaging a futures contract price from a board of trade over a given period of time known as the “Discovery Period”. This price is called the “Projected Price” and the parameters outlining the futures contract, board of trade and discovery period can be found in the Commodity Exchange Price Provisions (CEPP).

Coverage Level

The grower elects to insure a percentage of their historical average known as the Approved APH. Coverage levels available range from: 50% to 75% (80% & 85% levels are available for some crops) in 5% increments. Some crops allow for separate coverage levels by type or by irrigation practice.

Price Election

The producer can also elect to insure less than 100% of the price on certain crops. Available Price Election percentages include:

Coverage Level CAT 50 55 60 65 70 75 80 85
% of Price 55 100 91-100 84-100 77-100 72-100 67-100 63-100 59-100
 

Prevented and Replant Coverage

The policy provides for coverage for Prevented Planting and Replant Coverage, however, the Crop or Special Provisions may modify or eliminate the coverage.
 

Unit Structure

Indemnities are calculated on each unit as elected by the grower. Unit structures available under the YP policy are:

  • Optional Units (OU)
  • Basic Units (BU), and
  • Enterprise Units (EU - not available for all crops)

Example

Policy Information

Approved APH Coverage Level Projected
Price
Price Election Acres Share Final Production to Count
100 85% $ 3 100% 200 50% 14,000

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% = $42,000

Indemnity Calculation

$51,000 - $42,000 = $9,000 X 50% = $4,500