Looking for Revenue Protection Crop Insurance in Seward?
We’ve got you covered.
At Suhr & Lichty Insurance Agency we realize that farming is the backbone of our country, and no matter how large or small your farming operation is, we have the expertise to help properly insure your business.
Being independent, we have partnered with the best crop insurance company in Nebraska. This is important because crop insurance costs are the same no matter what crop insurance provider you are with.
This means we have the flexibility to truly find you the best possible product at the best price.
What is Revenue Protection?
The Revenue Protection Plan provides protection against a loss of revenue caused by price increase or decrease, loss of production, or a combination of both. It is available for the same crops where YP coverage is available.
The RP plan uses the Commodity Exchange Price Provisions (CEPP) to establish the pricing, however it is a different from the YP plan since it uses two different price discovery periods. The projected price is determined in the same manner as YP and is used to calculate the premium, replant and Prevented Planting payments. The harvest price is released near harvest time. This price is used to calculate an indemnity.
The revenue protection guarantee is established by: Average Yield X Coverage Level X Insured’s Share Percentage X Projected Price.
An indemnity may be due when the calculated revenue (insured’s production X harvest price) is less than the revenue protection guarantee for the crop acreage.
Note: When the harvest price is released, if it is greater than the projected price, the revenue guarantee will be recalculated using the harvest price as well.
While the revenue guarantee is increased, the insured is not charged any additional premium for this increase. If the harvest price is less than the projected price, the policy guarantee remains at the projected price.
How can Revenue Protection help you?
Revenue Protection (RP) provides coverage to protect against loss of revenue caused by low prices or low yields or a combination of both. This crop insurance policy has become a valuable risk management tool for farmers across the United States. More than 75 percent of the Federal crop insurance policies sold today are Revenue Protection.
One of the key components of a revenue policy is the utilization of a fall harvest price. RP policies allows the farmer to use the greater of the fall harvest price or the projected harvest price to determine the revenue guarantee. The farmer automatically has the harvest price protection when buying a Revenue Protection policy, but can choose to exclude it by selecting the Harvest Price Exclusion (HPE). If the farmer opts to do so, he will pay a lower premium rate.
The RP policy is designed to provide additional assurance to those farmers who market their crop before harvest. Many farmers enter a forward contract to sell a portion of their production before harvest. Usually these contracts pay the farmer for the production they deliver after harvest based on contracted prices. If the farmer loses the crop, he is still obligated to deliver under the forward contract. But since the crop is lost, the farmer would have to buy the commodity at the harvest price and deliver that or financially settle the buyer’s contract at the contract price. The purpose of RP is to provide the farmer with sufficient funds to settle the forward contract.
Another example of the importance of RP is for farmers who raise dairy cows, cattle, hogs, poultry or other animals and grow their own feed. If a disaster wipes out feed production, the farmer must enter the market and purchase feed at the going price, which would reflect the effects of the disaster. RP provides farmers with the funds to afford the higher costs should feed prices rise.
How much does Revenue Protection Insurance cost?
The cost of revenue protection insurance depends greatly on the type and amount of coverages you specifically need.
The good news is that, crop insurance pricing is the same for every company. Therefore the only cost differences are in choosing the right plan. Here at Suhr & Lichty Insurance we would be glad to develop a comprehensive risk management plan.
If you need assistance with your crop insurance, we’re the only number you need. A good crop insurance insurance company does much more than give you a free hat or calendar!