JOHN BERRY
Ag Marketing Agent
Lehigh Co. Extension
Crop Revenue Coverage
(CRC) is an insurance program
that guarantees a stated amount of
revenue. CRC (like Income
Protection) provides
comprehensive protection through
a dollar guarantee based on
Commodity futures prices. CRC
protects a producer
from loss of revenue resulting
from low prices, low yields, or a
combination of the two. Since the
protection of the producer’s
revenue is the primary objective,
CRC contains provisions
addressing both yield and price
risks. An additional feature of
CRC is that it provides
replacement value protection.
This works because the insurance
guarantee
increases if the Harvest Price
exceeds the Base Price. Unlike
MPCI coverage, with a CRC
policy, the producer does not
Used/Rental Liqu
(2) 1996 Knight 8030's, (1) with Lid and 21.5x16 1 Tires; (1) w/o Lid This Week's Special
and 22.5 Truck Tires, Both in Good Shape ■
1999 Houle 5,250 Gal. 28Lx26 Tires
1999 Houle 4800 Gal. 28Lx26, Brakes
BaJzer 3350Va<;uurrk * u
(1) Butler 3300 gaHank w/21.5x16.1 tires.
tank is in good shape
Badger 1,500 gal. Top Fill, Tank is Solid
Mack Truck w/4800 gal. Vacuum Tank
PUMPS
Houle 32' Lagoon Pump $5,750
Houle 9 5’ 3 Pt. Agi-Pump, Rebuilt $3,350
Houle 12’Agi-Pump on 3 Pt. Sliding, 1000 PTO $6,900
(2) Houle Maxi Pumps, 28” CALL
Houle Irrigation Pumps, on trailers, hyd. primers CALL
1999 Houle 12’ Super Pump, 1,000 PTO, Twin Nozzles $5,900
Houle 32’ and 42’ Agi Pumps $7,500 to $lO,OOO
1998 Houle 8/12’ Super Pump, Rental Unit $6,950
MISCELLANEOUS
Rubber Tire Scrapers, 3 pt. & Skid Steer; Also Push Blades
(2) CADMAN 2625 Hard Hose Reels
Badger, 1,500 gal., Top Fill, tank is
solid $2,150
19/ .joga.
Calumet Tank, in Good, Solid Cond.,
.ruck Runs and Drives, Needs TLC.
Buy The Tank, Get The Truck For
Free $6.500
Top Volume MID-ATLANTIC,
raging 4019 AshviHeßd., agn systems
Dealer Quarryville, PA 17566 **
In North America 800-222-2948 • 717-529-2782
necessarily have to experience an
insurable yield loss to receive an
indemnity payment. '
CRC Procedures
CRC has the same acreage and
production reporting dates,
optional units and quality
adjustment enhancements as
MPCI. An enterprise discount is
available if basic and optional
units are combined. An enterprise
unit is all insurable acreage of the
insured crop in the county in
which the producer has a share on
the date coverage begins for the
crop year. An enterprise unit must
consist of two or more basic units
(or two or more optional units) of
the same insured crop that are
located in two or more separate
sections, section equivalents, or
FSA farm serial numbers. With
enterprise units, the producer
must maintain any required
production records on a basic or
optional unit basis.
How CRC Works?
CRC is available for corn and
53,500\
52,150
Coming In, CALL
Butler 3300 gal., Good Shape
53,500
DM Mack 4,500 Gal. Tank, Ready
To Work CALL
soybeans in Pennsylvania. Prior
to sales closing, the producer and
his local insurance agent establish
a Minimum Guarantee per acre.
This is based on the producer’s
approved yield, a Base Price
(established using the appropriate
harvest futures contract), and the
farmer’s selected coverage level.
Producers can choose coverage
levels ranging between 50 and 75
percent. In selected established
counties, coverage up to 85
percent is also available.
Additionally, a Harvest
Guarantee is established at
harvest using the approved yield
(same as the MPCI policy), the
Harvest Price (established using
the appropriate futures contract),
and the farmer’s selected
coverage level. Once the crop is
harvested, the
producer’s actual yield is
multiplied by the Harvest Price,
resulting m the Calculated
Revenue.
The Final Guarantee is the
greater of the Minimum or
Harvested Guarantees. The
Calculated Revenue is compared
with the Final Guarantee; if the
Calculated Revenue is less than
the Final Guarantee, the farmer is
paid the difference as an
indemnity payment.
Base and Harvest Price
The Base Price is an average
of the daily settlement prices
during the month of Febuary on
the CBOT. The Harvest Price is
d Manure Equipment
$21,100
...CALL
$15,900
CALL
. *
\
\
DeLaval 3,000 Gal.
Good Shape
$3,253.12
r p
1987 International 7.3 diesel, 18,000
GVW, runs good, $6,000, Gruman
alum, b r
1990 Ford F-250 w/Stahl service body,
A/C. AT, $6,500
93 Dodge 350 Ram Cummins turbo,
dually, 5 Sp., A/C, cruise, Tilt, set up
for Gooseneck, $9.500
an average of the daily settlement
prices for the November futures
contract. The Harvest Price is
used to determine the Harvest
Guarantee and Calculated
Revenue. The Harvest Price
cannot exceed or fall below the
Base Price by more than $1.50
per bushel on com and $3.00 per
bushel on soybeans. (The Harvest
Price IS NOT the price a producer
receives for his crop at the local
elevator.)
What is the CRC Price
Percentage?
The farmer selects a Price
Percentage that is multiplied
times the relevant monthly
averages for the Base and Harvest
Prices to calculate the CRC
policy’s final Base and Harvest
Prices. Farmers may select 100
percent or 95 percent as the Price
Percentage for their policy. If the
farmer has never selected a Price
Percentage, then the policy’s
Price Percentage defaults to 95
percent.
Examples
In this next section, lets look at
how CRC would perform under
different combinations of higher
or lower prices and normal or
reduced yields.
Example 1.
Harvest price ends up higher
than the Base Price —With a 34
Percent Production Loss
Fabricators of Galvanized Barn Equipment
Loop Stalls, Tie Stalls, Cates, Deadlocks
Lancaster Farming, Saturday, April 15, 2000-A39
Approved APH yield
bushels per acre
Coverage Level = 65%
Base Price = $2.20 per bushel
Harvest Price = $3.00 per
bushel
Production
acre
Crop Value = Production times
Harvest Price = $138.00
Revenue Guarantee =
Approved APH yield times
Coverage Level times the higher
of Base Price or Harvest
Price
Revenue Guarantee = $136.50
Revenue Guarantee - Crop
Value = CRC Indemnity
$136.50-$138.00 = $O.OO
In example 1, prices were
higher at the time of the harvest
price calculation than at the time
of the base price calculation. As a
result, the revenue guarantee
increased from $lOO.lO to
$136.50. However, the
combination of the 46 bushel
yield and the $3.00 price provided
a revenue of $l3B per acre which
was slightly above the guarantee
of $136.50, resulting in no CRC
indemnity being paid out
Example 2.
Harvest ends up higher than
Base Price With a 57 Percent
Production Loss
= 46 bushels per
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