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2002 CRC & RA Examples

Corn

Proven Yield:                                                150 bu/A
Coverage Level                                           75%
Guaranteed Yield (Trigger Yield)                   112.5
Spring Price (Feb avg of Dec Corn)               $2.50
Guaranteed Revenue                                     $281.25/A
Maximum/Minimum Price (CRC)                  +/- $1.50

Outcome #1 Higher Fall Price than Spring Price

Fall Price (November avg of Dec Corn)   $3.10/bu

Spring Guarantee  (112.5 x $2.50)=$281.25

Fall Guarantee       (112.5 x $3.10)=$348.75

Final Guarantee would be the higher of the spring or fall price, so final guarantee would be $348.75/A with a trigger yield of 112.5 bu/A.

Outcome #2 Lower Fall Price than Spring Price

Fall Price $2.00/bu

Spring Guarantee  (112.5 x $2.50)=$281.25

Fall Guarantee    (112.5 x $2.00)=$225.00

Final Guarantee would be the higher of the spring or fall price, so in this case it would be $281.25/A.  The trigger yield would be 140.6 bu/A. ($281.25/$2.00=140.6 bu).

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