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Loss Calculation for One Acre
To learn more about Farm Bureau's Revenue Assurance, consider the example below
- a farm operated as a basic unit, with one acre each of corn and soybeans.
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The producer provides the following information:
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APH for corn: 140 bushels per acre
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APH for soybeans: 40 bushels per acre
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The producer considers two options:
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To buy RA on the corn and soybeans separately
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To buy RA on the whole farm, which protects the combined revenue of the acre of
corn and the acre of soybeans.
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The agent provides the following information to the producer:
Projected Board/Exchange price
|
Projected Board/Exchange price |
| Corn |
$2.00 per bushel |
| Soybeans: |
$5.00 per bushel
|
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Based on the above information, the producer is given a range of revenue
coverage options that are 65-85% of expected per-acre revenue:
Insurable per-acre revenue for corn:
Insurable per-acre revenue for soybeans:
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The producer in this example chooses the maximum per-acre revenue guarantee:
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Corn: $238.00
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Soybeans: $170.00
If the producer chooses the whole-farm option, the revenue guarantee on the two
acres is $408.00 ($238.00 + 170.00). The per-acre guarantee under the
whole-farm option is $204.00 ($408.00 / 2).
If combined corn and soybean revenues exceed guarantee, no indemnity is paid.