Margin Protection
Margin Protection offers coverage for unforeseen drops in operating margin, calculated as revenue minus input costs. This program is based on county-level data from the RMA Actuarials, using average revenue and input costs to determine coverage amounts and indemnity payments. Find your Expected Yield, Expected Price and Expected Costs for your county here: AIB Landing Page.
Since Margin Protection relies on area averages, it may not accurately represent your personal situation.
Payments may be issued when the Harvest Margin for the county falls below the Trigger Margin, which can happen due to reduced revenue or increased input costs. Margin Protection will cover a part of that deficit.
Margin Protection Highlights
Purpose
Shields against unforeseen price drops, yield reductions, and input cost fluctuations.
Coverage
Comprehensive protection based only on county level actuarial data. Input costs include diesel, nitrogen, phosphorus, potassium, interest, and fixed costs.
Range
Offers coverage from 70% to 95%.
Exclusions
Cannot be purchased with SCO or ECO.
Credit
If you have a Base Policy, a credit applies to the MP Premium.
Deduction
Indemnity from Base Policy is subtracted from the indemnity from Margin Protection Policy.
Protection Factor
Ranges from 80% to 120% to assist with premium costs.
Subsidies
Vary from 44% to 59%, decreasing as coverage levels increase.
How It's Calculated:
EXPECTED MARGIN
TRIGGER MARGIN
HARVEST MARGIN
Expected County Yield x Projected Price = Expected Revenue.
You then take your Expected Revenue - Expected Costs = Expected Margin.
First, take 1 - Coverage Level. For example, if you had a 95% Coverage Level, you would take 1-95% = 5%
Take your Expected Revenue x Deductible = Margin Deductible.
Then take Expected Margin - Margin Deductible = Trigger Margin
Harvest Yield x Harvest Price - Harvest Costs.
Take your Trigger Margin - Harvest Margin to see if you qualify for a loss.
​
Take indemnity x Protection Factor
EXAMPLE
167 x $4.56 = $761.52 (Expected Revenue)
$761.52 - $123.23 = $638.29 (Expected Margin)
First, take 1 - Coverage Level.
For example, if you had a 95% Coverage Level, you would take 1-95% = 5%
$761.52 x (.05) = $38.08 (Margin Deductible)
$638.29 - $38.08 = $600.21 (Trigger Margin)
168 x $4.35 - $140 = $590.80
​
Trigger Margin = $600.21
​
$600.21 - $590.80 = $9.41
​
$9.41 x 1.2 (Protection Factor) = $11.29 / acre
​
Margin Protection Cycle
Aug 15 - Sept 14
Margin Protection Prices, Yields, and Input Costs determined.
Sept. 30th
Sales Closing Date.
April 1 - 30th
Harvest Input Costs determined.
Oct 1 - 31st
Harvest Prices are determined.
April
​
Final Yields are determined to see if there is an indemnity due.