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| GRP is a bushel guarantee. If your county yield "triggers" a bushel loss, and you have a 90% coverage level, 100% price level, each loss bushel will pay:
1 bu X $3.75 (GRP corn price) X 1.5, divided by level of coverage (90%) = $6.25 per bushel.
Soybeans, same scenario, = $14.17 per bu short of 90% of ECY (expected county yield).
If you trend with the county, GRP (at 100% price level), even with lower starting prices, will pay more than MPCI on a bushel for bushel basis.
Rob | |
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