The CRC price for 2004 is $3.84.

CRC is a revenue based insurance which provides coverage based on a producer's APH and the current market price. It provides a minimum dollar coverage against losses resulting from a decrease in market price, a loss in production, or a combination of both. When used as a key part in a farmer's marketing plan, CRC provides several benefits over traditional crop insurance plans.

With CRC, you may choose a coverage level of 50-85% of your APH. Two prices are involved in CRC-Base Price & Harvest Price. The Base Price is determined between August 15th and September 14th by using the pre-harvest year's average daily settlement price for the harvest year's CBOT September wheat futures price plus an adjustment equal to the current 5-year average difference between the August daily settlement price for CBOT soft red wheat and the PME soft white wheat contract. (For example: For the 2004 crop year, the Base Price was determined between August 15th and September 14th of 2003 using the average daily settlement price for September 2004 wheat futures plus the adjustment.) The Harvest Price is determined by using the average daily settlement price for August of the PME for soft white wheat. The harvest price can never be +/- $2.00 of the Base Price.

Your Minimum Guarantee is equal to your APH x Level x Base Price. If you have a 50 bushel guarantee with 85% coverage and the Base Price is $3.84, your minimum guarantee is $163.20. After the harvest price has been released, your harvest guarantee will be calculated (APH x Level x Harvest Price). If the Harvest Guarantee is higher than the Minimum Guarantee, the Harvest Guarantee will be used. If not, the Minimum Guarantee will be used. Regardless, you will pay premium based on your Minimum Guarantee.

LOSS SCENARIO
The following table will give you an idea of how to calculate a loss under CRC. We will assume a 50 bushel guarantee with 85% coverage and a Base Price of $3.84. The Minimum Guarantee is $163.20 per acre. Harvest Revenue is equal to bushels harvested multiplied by the harvest price.

Scenario

Harvest Price

Harvest Guarantee

Bushels

Harvest Revenue

Loss Payment

Low Bushels, Low Harvest Price
$3.00

$127.50/acre

30

$90.00/acre

$73.20/acre

Low Bushels, High Harvest Price

$4.00

$170.00/acre

30

$120.00/acre

$50.00/acre

Average Bushels, Low Harvest Price

$3.00

$127.50/acre

50

$150.00/acre

$13.20/acre

Average Bushels, High Harvest Price
$4.00

$170.00/acre

50

$200.00/acre

No Loss

Scenario	Harvest Price	Harvest Guarantee	Bushels	Harvest Revenue	Loss Payment
Low Bushels, Low Harvest Price	$3.00	$127.50/acre	30	$90.00/acre	$73.20/acre
Low Bushels, High Harvest Price	$4.00	$170.00/acre	30	$120.00/acre	$50.00/acre
Average Bushels, Low Harvest Price	$3.00	$127.50/acre	50	$150.00/acre	$13.20/acre
Average Bushels, High Harvest Price	$4.00	$170.00/acre	50	$200.00/acre	No Loss