Yield Guarantee
Crop insurance is a great risk management tool to use to guarantee bushels.
Price Guarantee
Price guarantee works similar to a put option, you are selling a floor price in February. If the harvest price is lower, you may collect an insurance indemnity. If the harvest price is higher, you are guaranteed the higher price.
Revenue Guarantee
The beauty of a revenue guarantee is that it allows you to guarantee the combination of bushels and price. You can’t get this combination of risk management anywhere else. As you plan for 2023, you want to make sure you cover your cost of production and build in a profit margin.
The benefits of Revenue Protection
- Lock in a revenue guarantee to cover your cost of production and a profit margin.
- Provides upside price potential. If the harvest price is higher than the project spring price, you are guaranteed the higher price for any lost bushels.
- Coverage can be selected by basic, optional, enterprise, or multi‐county enterprise unit structures.
- Ability to sell grain prior to harvest; up to your bushel guarantee.
- This product is subsidized. Other risk management tools do not provide a subsidy discount off the true cost of the product.
- The price of the product is based on the projected spring price, even if the harvest price comes in higher.
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