Yield Protection (YP)
Yield Protection policies insure producers in the same manner as APH policies, except a projected price is used to determine insurance coverage. The projected price is determined in accordance with the Commodity Exchange Price Provisions and is based on daily settlement prices for certain future contracts. The producer selects the percent of the projected price he or she wants to insure, between 55 and 100 percent.
The Yield Protection plan provides coverage against a production loss due to unavoidable, naturally occurring events for crops for which revenue protection is available but was not selected. Coverage is also provided for Replant and Prevented Planting.
The Yield Protection plan will use regional exchanges to derive the Projected Price used to establish the insurance guarantee and premium for the crop. The price discovery period, release dates, Board of Trade utilized, and additional pricing information will be contained in the Commodity Exchange Price Provisions (CEPP) and is available at your local agent’s office or on the Risk Management Agency (RMA) website.
Yield Guarantee and Coverage Level
Coverage is provided as a production guarantee (approved yield x coverage level). The YP guarantee is determined by multiplying the production guarantee by the Projected Price. The Projected Price is used to determine the premium, and any replant payment or prevented planting payment and to value the production to count. The Harvest Price is not used for Yield Protection.
Coverage levels are available from 50% to 75%, in 5% increments, up to 100% of the Projected Price, which is determined by the Commodity Exchange Price Provisions(CEPP). 80 and 85% coverage levels are available in limited areas.
A Basic Unit is all acreage of the crop in the county in which the insured has 100% ownership or shares with the same person.
Optional Units are divisions by sections or section equivalents or, in some locations, by Farm Serial Number, 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.
A Whole Farm Unit combines all of an insured’s acres for all qualifying crops in the county into a single insurance unit.
Catastrophic coverage is available at 50% of the approved yield and 55% of the Projected Price (50/55). This is limited to basic units only.
This information is intended for informational purposes only. Nothing contained herein can or should be interpreted to take precedence over policy language, Federal Crop Insurance Corporation/Risk Management Agency regulation, and Underwriting or Loss Adjustment rules.