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| Hey fellas, I know this can be confusing when you don't deal with it everyday. Jedeka almost has it right. But, in your last scenario where you had the price coming in at 3.00 this fall, you figured one thing wrong. Whatever you harvest this fall, no matter how much or how little, will be multiplyed by the fall price. (3.00 in this instance) So, you said 130 bushels harvested x 3.00= $390. Your original guaranteed was $513.38, so 513.38 - 390= 123.38 indemnity payment. Remember guys that with RA or CRC when the price goes down at harvest, your guaranteed bushels, essentially, go up in order to equal your original guarantee. And, if price goes up at harvest, your guaranteed bushels stays the same, but your guaranteed revenue increases. I hope this helps a little.
P.S. Rich- I'm not sure where you got the 75% of the price in your example, but that is incorrect. You are right with your approved yield x 75%(or whatever coverage elected) to find your guaranteed bushels, but the price is always 100% with RA and CRC. | |
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