Most insureds have Revenue Protection on their wheat, which provides a revenue per acre guarantee. The project price or spring price is set in February for September delivery. The spring price for wheat was $8.87 per bushel.
To calculate the revenue per acre, you can use the formula:
APH X level of coverage X $8.87 (spring price)
For example, if your APH is 60 bushels per acre and you have 75% coverage, your revenue guarantee would be (60 bu X 75% X 8.87) = $399.15 per acre.
Now, the Fall price of wheat has been finalized at $7.97 per bushel.
Yield X $7.97 (fall price)
Assuming your yield matches your original guarantee (45 bu X $7.97), you would have a revenue of $358.65 per acre for the fall crop.
In this following example, if your actual yield matches your guarantee, there would be a revenue loss:
=-=- $399.15 (spring revenue)
=-= -$358.65 (fall revenue)
=-– =$40.50 per acre payment
For those who use a bushel number as a trigger, you can also calculate your guarantee.
To calculate your guarantee, you can use this formula:
(APH X Level of Coverage) = Guaranteed bushels
For example, if your APH is 60 bu per acre and you have 75% coverage, your guaranteed bushel in the spring would be 45
Guaranteed bushels x Spring Price = Guarantee Revenue
Taking the guaranteed bushel of 45 x $8.87 spring price = $399.15
Guarantee Revenue ÷ Fall Price = New Bushel Guarantee
$399.15 ÷ $7.97 = ≈50.08 bu
This price decline in wheat guarantees you approximately 11% ($8.87/$7.97=1.1129) more bushels than your spring guarantee.
Please refer to the attached trigger chart to determine if you have a loss on your wheat.
Report all losses or potential losses as soon as possible, and make sure to do so no later than the end of harvest or October 31st, whichever comes earlier.