The Income Protection Price (IP) for 2004 is $2.43.

Barley Income Protection provides revenue insurance that protects against a loss of revenue due to low yields, low prices or a combination of both. Barley IP may offer a more cost effective plan of insurance. It is available in 50-85% coverage levels. All of your Barley, regardless of share or location, is placed into a single unit called an Enterprise Unit. The price is determined by tracking the September Barley futures price on the CBOT during the month of February. It is released on March 5.

A loss is payable if the harvested and appraised production to count multiplied by the harvest price is below the dollar guarantee (equal to the Base Price x Level x APH). Unlike CRC, a higher harvest price does not mean a higher guarantee. This means that a yield loss may be offset by a price increase, or a price decrease may be offset by a yield increase.

Loss Examples:

Base Price is greater than the Harvest Price.
Assume 100% Share; APH = 70 bu/ac; 75% coverage level
Base Price: $2.43, Harvest Price: $2.10
Dollar Guarantee: 70 bu/ac x 75% x $2.43 = $127.58/acre guarantee
Harvest Revenue: 30 bu/ac x $2.10 = $63.00/acre
Indemnity: $127.58 - $63.00 = $64.58/acre Indemnity due

Base Price is less than the Harvest Price.
Assume 100% Share; APH = 70 bu/ac; 75% coverage level
Base Price: $2.43, Harvest Price: $2.75
Dollar Guarantee: 70 bu/ac x 75% x $2.43 = $127.58/acre guarantee
Harvest Revenue: 30 bu/ac x $2.75 = $82.50/acre
Indemnity: $127.58 - $82.50 = $45.08