Yield Protection vs. Revenue Protection
Not sure which protection is best for your operation? Yield Protection or Revenue Protection? Let’s look at the differences.
What is Yield Protection?
Yield Protection insures the amount of grain produced. Based on your actual production history (APH), you would select a coverage level that would be used to set the number of bushels you’re guaranteed. This would then be multiplied by the projected price, which is set before the sales closing date based on commodity price averages from the Chicago Board of Trade (CBOT).
What is Revenue Protection?
Revenue Protection protects against lost production, but it has the additional advantage of protection against lost revenue due to price changes. RP sets a dollar amount using two numbers: the projected price covered above, or a second price established at harvest, using similar criteria from the CBOT.
RP uses the higher of these two prices to establish your guaranteed revenue.