New Crop Insurance Products
There are many new crop insurance products out this year that we are excited to offer our clients. Specific details of each product are provided to help you make the best decision for your operation. Here is an overview of each of the new products:
Added Price Option
Added Price Option (APO) is supplemental insurance coverage for your Multi-Peril Crop Insurance (MPCI) or Yield insurance and gives you the option of locking in a projected bushel price higher than the MPCI price. Choose an added bushel price within a range over your current MPCI price election without selection of a specific price projection month.
How it works: Choose an added bushel price within a range over your current MPCI price election without selection of a specific price projection month. This bushel only policy pays in event of a bushel only loss. APO does not require selection of a specific price projection month.
Enterprise Plus, a cross between enterprise and optional units, includes coverage for irrigation for 2014 which will allow producers to separate out irrigated units from non-irrigated units.
How it works: The producer will select a level of multi-peril revenue protection insurance and then enterprise plus may be purchased as an add-on product that separates out databases up to 10 sub-units. This allows the producer to capture the enterprise unit subsidy while having optional unit protection. If the underlying Enterprise Unit policy does not have an indemnity payment, Enterprise Plus is eligible to pay on a unit by unit basis. If the underlying Enterprise Plus policy does have an indemnity payment, Enterprise Plus is not eligible. Producers can separate out units by soil quality, input costs, location, and practice to minimize risk exposure. The bottom line is that this option provides better protection than an enterprise unit policy and is cheaper than an optional unit policy.
E Weather utilizes the Chicago Market Exchange (CME) weather options to provide specific coverage for perils related to precipitation and temperature and allows the producer to buy any amount of coverage for a specific peril during the growing season.
How it works: E Weather adjusts the producers risk management plan to fit the risk a specific growing season presents and there is no sales closing date.
Harvest Max is designed to help producers protect against shallow yield losses while protecting revenue and profits. It complements a federal multi-peril policy by covering the difference between a guarantee and actual production history.
How it works: Harvest Max utilizes an entire crop unit, using a database that covers your entire farm and allows flexibility by allowing you to purchase on any amount of acres. The pricing period for this product is in December and producers can select from 30% to 120% of the December price on corn and 30% to 110% on soybeans. It allows for flexibility in price and acreage amount, which allows the producer to control the premium amount to fit into their bottom line and cover only acres that need extra coverage.
Multiple Price Discovery (MPD)
Multiple Price Discovery (MPD) is a crop insurance add-on product for producers that carry revenue protection on a Federal Common Crop Insurance Policy (CCIP) for corn or soybeans. No need to wait for the February average price with the MPD policy. It allows you to lock in a higher base price with spring pricing in the fall - up to 3 or 4 months earlier than available on the Federal Crop Insurance revenue protection plan.
How It Works: Discovery prices are determined during 2 pricing periods with one ending November 15 and the second ending December 15. The settlement prices use the highest average Chicago Board of Trade monthly price for the months of November, December, January or March. Multi-Peril Revenue Protection or Area Revenue Protection (ARP) coverage is required. Premiums are due the same time as multi-peril premiums. Not available on corn insured as silage or high risk land. Some other exclusions may apply.
Price Flex can be used on corn, soybeans and wheat and gives producers the opportunity to lock in a higher revenue guarantee price from September to July. Much like Revenue Net and Multiple Price Discovery, Price Flex is another option producers have to increase their overall guarantee by locking in a higher price on the multi-peril policy.
How it works: Price flex allows the producer to choose a 15 day or one month pricing period from September to July. The policy then locks in the revenue price for the period the producer chooses, and locks in that price if it is higher than the February pricing period.
Revenue Net is an add-on product for producers who carry Revenue Protection (RP) on their Federal Common Crop Insurance Policy (CCIP). It gives the flexibility to lock in a higher revenue guarantee price anytime from September to January for the current crop year.
How it works: Revenue Net allows the producer to choose any two week pricing period from September to February to lock in a higher guarantee. Locking in a price at an earlier date, coupled with their CCIP bushel guarantee, allows the producer to analyze expenses (cash rent, seed, fertilizer, etc.) and guaranteed revenue to assure a profitable position.
Total Weather Insurance
Total Weather Insurance is a weather-based shallow-loss insurance product designed to provide extra coverage on specific fields that are higher risk or higher input. The product tracks projected yield using field level weather data, derived from area weather stations. This product projects yields that are based on weather events, crop growth stage, and field soil type, and provides the producer with a daily weather and yield tracking reports from their climate.com portal.
How it works: Coverage can be adjusted to any bushel loss trigger and bushel price to allow producer to adjust premium to fit into their bottom line. This is an alternative to optional units on high variability acres.