Margin Protection

Product Brochure

Overview

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
  • Harvest yields are established by RMA, not NASS


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

CornDiesel, Urea, Diammonium Phosphate (DAP), Potash, Interest
SoybeansDiesel, DAP, Potash, Interest
RiceDiesel, Urea, DAP, Potash, Interest
WheatDiesel, Urea, Monoammonium Phosphate (MAP), Potash, Interest

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PRODUCT BROCHURE

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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.

Additional Information

Price Discovery

Projected Price discovery periods for Margin Protection occur earlier than MPCI policies because producers are making production plans and arranging for the purchase of inputs late in the preceding calendar year and early in the year the crops will be planted. Changes in prices during this period can affect profitability. Harvest Price discovery periods for the commodities are the same as MPCI discovery periods.

The projected price discovery period is August 15 - September 14 for Corn, Soybeans, and Wheat. For Rice with a 1/31 SCD, the projected price discovery period is December 15 - January 14. The projected price discovery period for Rice with a 2/28 SCD is January 15 - February 14.

Some inputs are subject to price changes as well, such as diesel and interest. The discovery periods for projected prices of inputs subject to price change are the same as the margin price discovery periods for the commodities. The price discovery periods for harvest prices of inputs subject to price change occur earlier than the commodities because a high percentage of the quantity of inputs needed to produce a crop are associated with planting and the few weeks immediately following.

For more information, view RMA’s Margin Price Provisions.

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 premium credit on your Margin Protection policy to offset the cost. 


Sales Closing Dates (SCD) 
CORN, SOYBEANS & WHEAT: September 30
RICE: Varies by state & county; aligns with county’s spring MPCI SCD of January 31 or February 28

Payments
Any indemnities owed will be paid when final county yields are available, in June 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.

Availability
Margin Protection is available in select counties for corn, rice, soybeans, and wheat in the states shown: 

States Available (in select counties)

CornIL, IN, IA, KS, MI, MN, MO, NE , ND, OH, SD, WI
SoybeansIL, IN, IA, KS, MI, MN, MO, NE , ND, OH, SD, WI
RiceAR, CA, LA, MS, MO, TX
WheatMN, MT, ND, SD