Your Guide to Understanding Yield & Revenue Protection

Farming comes with many financial risks, especially when so much is out of your control, like market changes or natural disasters. That’s where multi-peril crop insurance (MPCI) comes in. It helps protect your yield and revenue, giving you peace of mind and a stronger foundation for the future.

Here’s how MPCI works, how it protects your farm, and why it’s important for maintaining your operation’s sustainability in the long run.

Types of MPCI Coverage
MPCI typically offers two core forms of protection:

• Yield Protection helps cover you if something should cause your crop yield to drop below your insured level. If that happens, MPCI steps in to compensate you for the loss.
• Revenue Protection combines yield protection with price coverage. So, even if crop prices drop, your expected revenue is still protected.

What is Revenue Protection?
Revenue Protection (RP) is like a safety net, helping to protect your revenue when unexpected events impact your crops.  Think of it as one policy that takes care of multiple risks. Here’s the good news: the USDA backs this program, making it a reliable option for farmers nationwide. With the USDA’s support, MPCI helps you bounce back when nature or market conditions don’t go as planned, giving you one less thing to worry about.

Yield Protection: Safeguarding Your Harvest
Imagine that after months of hard work planting, caring for, and keeping an eye on your crops, a sudden storm wipes out a big chunk of your harvest, or maybe a drought leaves your fields producing less than you expected. Without insurance, situations like these can cause serious financial stress—or even force you to shut down entirely.

That’s where yield protection coverage comes in. Here’s how it works:

• Insured Yield: With MPCI, you can insure up to 85% of your crop’s historical average yield, potentially higher if you choose some yield-adjusting options.

• Trigger Event: You’ll receive a payout if your yield falls below the insured level due to a covered event.

By covering production shortfalls, yield protection helps keep your farm running smoothly and your finances stable, even during rough seasons.

Revenue Protection: Protecting Your Bottom Line
While high yields are great, profitability ultimately depends on market conditions. Even with a bumper harvest, unpredictable commodity prices can leave you earning less than expected.

That’s where revenue protection comes in—it’s like a safety net for your farm, covering both production and market ups and downs. Here’s how it works:

• Projected Revenue Guarantee: Your coverage is based on your insured yield and the expected market price.

• Price and Yield Ratio Protection: Your coverage is based on revenue which is calculated using both yield and price so coverage will pick up where the price and yield fluctuations cause a lower than covered revenue.

Revenue protection helps take the guesswork out of farming, giving you more financial stability and peace of mind when market prices fluctuate.

How Multi-Peril Crop Insurance Helps Give You Long-Term Success

1. Peace of Mind
   Knowing you have the right MPCI coverage, you can operate confidently throughout the growing season, even with uncertainties. Farmers who use crop insurance often report lower stress levels and improved decision-making because they know their financial risk is minimized.
2. Financial Stability
   Uninsured losses not only wipe out profits but may also compromise your ability to pay for essential expenses. With MPCI, your revenue remains secure even during poor production years or low-market-price seasons.
3. Access to Credit and Expansion Opportunities
   Many lenders view insurance policies like MPCI as added financial stability when evaluating loan applications. This added assurance can give you access to the funds you need to expand into additional acreage, upgrade machinery, or improve irrigation.
4. Support During Worst-Case Scenarios
   Natural disasters or market failures can wreak havoc on farming communities. MPCI provides prompt support to help farmers recover and rebuild without fear of bankruptcy.
5. Cushioning Against Price Volatility
   Agriculture markets are often unpredictable. Whether due to geopolitical events or trade issues, farmers face constant price uncertainty. Revenue protection shields against these fluctuations, allowing you to plan with confidence.

Strengthen Your Farming Operation Today
Crop insurance isn’t just a nice-to-have—it’s a smart move to protect your operation. MPCI gives you the stability to plan ahead, no matter how unpredictable things get.

Don’t let the next frost, heavy rain, or market dip catch you off guard. Act now to safeguard your crops, income, and peace of mind.

Are you ready to find the right coverage for you? Contact Momentum Ag today to get a second opinion on your crop insurance!