MARGIN PROTECTION

Provides coverage against an unexpected decrease in operating margin.

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PRODUCT OVERVIEW

How it Works

  • The popular Revenue Protection insurance focuses on the revenue side of your balance sheet, but does not protect you against unexpected increases on the input cost side.

    That’s where Margin Protection comes in.

Listen to our team discuss how Margin Protection works.

How it’s calculated

  • While the revenue formula is relatively simple (Yield x Price = Revenue, using the higher of the February or October price average), cost calculations are slightly more complex.
  • Costs are not based on the producer’s own costs; they are calculated by RMA, based on input prices from August 15-September 14. These include:
    • Variable inputs (diesel, NPK, interest rate)
    • Costs that are covered but do not change (seed, lubrication, select crop protection)
  • Note that land, rent and labor are not included.

Revenue and Margin Formula

    margin protection formula 

Dual-coverage delivers flexibility

  • Combining MP with other coverage options offers added flexibility.
    • You are able to base decisions on price guarantees in September, February and October. MP locks in the futures price in the fall, when the market typically rewards delaying sales.
    • You can purchase MP with either ARC or PLC.
    • MP is based on county yields, prices and inputs. This means indemnities are not paid until after USDA determines county yields – roughly six months or more after harvest.
  • If you have a claim on your individual RP policy, you receive that indemnity more promptly. But – you receive the higher of the two claims. Given a smaller “deductible” with a 95% policy, and the impact of the protection factor, MP may beat RP and you’ll receive the balance of the indemnity later.

Other ways MP and RP work together

  • MP offers higher coverage up to 95%.
  • MP does not cover prevent plant, replanting or quality adjustment; RP does.
  • RP and MP together provide peace of mind and protection for both individual risk protection and area coverage for the expected operating margin.
  • Analysis of history suggests an advantage over the long run to purchasing both.

Available to all qualifying producers regardless of race, color, national origin, gender, religion, age, disability, political beliefs, sexual orientation, and marital or family status.

MARGIN PROTECTION FEATURES

no-acre-limits 

Area-based plan.

line-chart-upwards 

Coverage 70% up to 95% of the trend-adjusted county yield.

payroll 

Protection factors from 0.8 to 1.2. Hence, MP can pay up to $1.20 for every dollar of RP loss.

circle-dollar 

Highly subsidized premium benefit.

code of ethics 

A premium credit is applied to MP when purchased with an underlying policy such as RP.

financials 

Initial price discovery is August 15 – September 14.

payment-schedules 

Purchase deadline is September 30.

Grain Bin 

Uses the same harvest price as RP and Supplemental Coverage Option (SCO).

Why Work With Us For Insurance?

Dedicated Specialists

They focus 100% of their time on crop and livestock insurance — every working day of every week in the year. They don’t sell property, casualty or life insurance.

Highly Trained

Our insurance officers receive annual training on RMA changes to crop and livestock insurance plans and stay informed throughout the year.

Financial Expertise

As a lender, we understand financial risk and work to protect your working capital, not just your crop or livestock.

"They've been excellent. Within minutes they called me back to get the claims process started."

Ryan & Amy

Grain & Beef Producers, Iowa

Ryan & Amy

Trigger Yield Calculator

Trigger yields assist producers with crop insurance and risk management decisions. Understanding what will trigger loss payments is an important part of choosing the correct level of crop insurance coverage.

The results provided by this tool are for estimation purposes only; actual loss triggers may vary. Contact your Farm Credit Services of America insurance officer for more information.

CROP INSURANCE EDUCATION

Precision Farming Data for Crop Insurance
Report your crop insurance acreage from your planter seat using your precision data.
Wildfire and Hurricane Indemnity Program-Plus
Producers who experienced natural disasters in 2018 or 2019 may qualify for disaster aid under the WHIP+ program.
Multi-county Enterprise Unit Endorsement
Contact your local FCSAmerica insurance agent to learn if the new MCEU would be advantageous to your operation.
Make the Most of your Revenue Insurance
Understanding how the right crop insurance and knowing your cost of production work together is critical.
Crop Insurance: Getting the Right Coverage
Learn why choosing a farm lender is important to getting the right crop insurance plan.
Crop Insurance & Grain Marketing: Are You Taking Advantage?
Crop insurance and marketing goals can work together to provide the best financial return.
Grain Marketing Survey: Midwest Farmer Practices
To shed some light on grain marketing practices, FCSAmerica commissioned a survey of more than 600 Corn Belt producers. The full report reveals insights into the tools and strategies of farmers who are satisfied with their grain marketing practices.

Ready to Talk?

Contact us if you have questions or need more information. Fill out the form, or connect with your local office using the Office Locator.

FCSAmerica serves farmers, ranchers, agribusinesses and rural residents in Iowa, Nebraska, South Dakota and Wyoming. For inquiries outside this geography, use the Farm Credit Association Locator  to contact your local office.