The projected price is $6.55/bushel on spring wheat. The harvest price was announced at $5.69/bushel. So now what? Is your wheat insured for $6.55 or $5.69?
Well, technically we use both to calculate guarantees. Here’s how, start with the approved yield for that field and multiply it by your coverage %. For example, 45 bushel approved yield, multiplied by 60% coverage is 27 bushels.
45 bushels x 60% = 27 bushels
27 bushels is your trigger yield. Anything under 27 bushels/acre would potential be a loss and you should turn a claim in. Take your 27 bushels and multiply it by the number of acres, 25 acres in this case and you have your production guarantee, 675 total bushels.
27 bushels x 25 acres = 675 total bushels
The total bushels are then multiplied by the projected price of $6.55 to equal your total guarantee of $4421.25.
675 bushels x $6.55 = $4421.25
When the harvest price is released, it is used to calculate a new total bushel amount. The total guarantee of $4421.25 is divided by the harvest price of $5.59 to calculate total bushels of 777.
$4421.25 divided by $5.69 = 777 bushels
Now instead of triggering a loss at 675 bushels from 25 acres, 777 bushels will trigger a loss.
Now wasn’t that fun?! :)
Bottom line, get the wheat bushels to us and ask us to do all the fun math to see if there is a loss. Remember, a claim can’t get paid unless it’s turned in!
