Yield Protection is a multiple peril crop insurance product that provides protection against a loss in yield due to nearly all natural disasters. For most crops, that includes drought, excess moisture, cold and frost, wind, flood, and unavoidable damage from insects and disease. This product guarantees a yield based on an individual producer's actual production history. If the production to count is less than the yield guarantee, the insured is paid a loss.
Specifics of Yield Protection
• Protection against production loss.
• Based on a producer's own production history.
• Available in 5% increments from 50% to 85% coverage.
• Provides coverage on basic, optional, or enterprise units
• Offers a competitive premium
• Subsidized by FCIC
How does it work?
• Establishes a guarantee of bushels per acre.
• Yield Protection price is established by using 100% of the average closing price of the December Futures Contract of the Chicago Board of Trade (CBOT) during the month of February for corn. For soybeans, it is 100% of the average closing price for November Futures Contract on the CBOT during the month of February.
• Pays an indemnity if the production is less than the guarantee.