Margin Protection is a crop insurance coverage option that provides coverage against an unexpected decrease in your operating margin caused by:
- Reduced county yields
- Reduced commodity prices
- Increased price of selected inputs
- Any combination of the above
Margin Protection is area-based, using county-level estimates of average revenue and input costs to establish the amount of coverage and indemnity payments.
How Does It Work?
- MP provides coverage that is based on an expected margin per acre for each applicable crop, type, and practice.
- MP is area-based coverage and may not necessarily reflect a producer’s individual experience.
- The Harvest Price Option allows you to choose to include replacement cost coverage to the Margin Protection policy. Similar to many popular revenue-based policies, if the harvest price is greater than the projected price, the expected margin and the trigger margin are recalculated based on the higher harvest price.
What Are the Benefits?
- Select only the amount of protection your operation needs
- Utilize a price discovery period that differs from other MPCI products
- Choose the Margin Protection Harvest Price Option
- (MP-HPO) to include replacement cost coverage
- Gain area-based coverage at a high level while maintaining individual-based coverage by adding MP to a RP or YP base policy
Determining the Margin
When determining the margin, two types of inputs are considered: those subject to price changes as listed below, and those not subject to price change (i.e. fixed from planting to harvest). Inputs not subject to price change are not specifically identified, but include: seed, machinery, operating costs (other than fuel), and similar expenses. Inputs subject to price change are identified in the Margin Provisions and include the following:Allowed Inputs Subject to Price Change
|Corn||Diesel, Urea, Diammonium Phosphate (DAP), Potash, Interest|
|Soybeans||Diesel, DAP, Potash, Interest|
|Rice||Diesel, Urea, DAP, Potash, Interest|
|Wheat||Diesel, Urea, Monoammonium Phosphate (MAP), Potash, Interest|
Coverage Levels and Premium Subsidies
Margin Protection provides coverage that is based on an expected margin for each applicable crop, type, and practice.
Expected Margin = Expected Revenue – Expected Costs
Expected revenue (per acre) is the expected county yield multiplied by a projected commodity price.
Expected cost (per acre) is the dollar amount determined by multiplying the quantity of each allowed input by the input’s projected price.
Choose an MP coverage level from 70 percent to 95 percent. This is considered relative to the expected revenue in the county.
Prices & Volatility Factors
The following CY margin projected prices and volatility factors are approved for the Margin Protection Plan. The margin projected price is used in conjunction with projected input prices and the expected county yield to derive the expected margin (per acre), trigger margin (per acre) and liability. The expected margins for each crop/county are available at the following web page on RMA’s public website. Click here for program details.
|Corn – Grain Type|
All Insured States
All Insured States
|Wheat – Hard Red Spring Type|
North Dakota & South Dakota
Eligible Insurance Plans
Margin Protection can be purchased by itself, or in conjunction with a Yield Protection (YP) or Revenue Protection (RP) policy purchased from the same Approved Insurance Provider that issued the Margin Protection policy. If you buy a YP or RP policy, you will receive a Margin Protection premium credit to reflect that indemnity payments from one policy can offset payments from the other.
Sales Closing Dates (SCD) September 30
Corn, Soybeans and Spring Wheat
January 31 or February 28
Any indemnities owed will be paid when final county yields are available, in the spring of the following year.
Insurance Types and Practices
All types and practices that are insurable for corn, rice, soybeans, and spring wheat in the respective county is listed in the Margin Protection actuarial documents.
Margin Protection is available in select counties for corn, rice, soybeans, and wheat in the states shown:
|Corn||IL, IN, IA, KS, MI, MN, MO, NE , ND, OH, SD, WI|
|Soybeans||IL, IN, IA, KS, MI, MN, MO, NE , ND, OH, SD, WI|
|Rice||AR, CA, LA, MS, MO, TX|
|Wheat||MN, MT, ND, SD|