Multi-Peril Crop Insurance (MPCI)
Multi-Peril Crop Insurance (MPCI) Explained
Multi-Peril Crop Insurance (MPCI) is the foundational risk management tool for producers, designed to protect against both yield losses and revenue declines. Your policy is uniquely tailored to your operation because it’s based on your Actual Production History (APH).
Having the right crop insurance can significantly reduce income volatility year-to-year, providing a strong financial safeguard in the event of a weather-related disaster, disease outbreak, or market instability.
Understanding Key MPCI Terms
To select the best coverage for your operation, it helps to know how your guarantee is calculated:
Actual Production History (APH): This is the producer’s historical average yield per crop in a specific county. It serves as the baseline for determining your coverage.
Coverage Level: The percentage of your APH that you choose to insure, typically ranging from 55% to 85%.
Projected Price: The initial coverage price per bushel set before planting season begins.
Harvest Price: An alternative coverage price set during the harvest period, used to determine potential revenue losses.
Guarantee per Acre: This figure is calculated by multiplying your chosen Coverage Level by your APH, and then by the higher of the Projected Price or the Harvest Price.
Why Choose Revenue Protection?
The greatest benefit comes from a Revenue Protection policy, which insures against losses stemming from both falling yields and declining prices. By combining these two factors, Revenue Protection offers superior per-acre coverage to protect your bottom line.
Core Benefits of Revenue Protection
Yield Protection: Protects your harvest based on your specific APH, ensuring the policy is tailored exactly to your operation’s history and needs.
Dual Price Protection: The policy uses two discovery periods (Projected and Harvest prices). This protects you from a market decline but also allows you to take advantage of an upward market, as your policy guarantees you the higher of the two prices.
Added Policy Features: Revenue Protection includes valuable ancillary benefits such as replant coverage and prevent plant coverage.
Policy Deadlines and Costs
MPCI premiums are partially subsidized by the federal government, making this crucial protection more accessible. Note that premiums and coverage only apply to planted acres.
Spring Crops (Corn, Soybeans, Grain Sorghum): Policies must be in place by March 15th.
Winter Crops (Wheat and Barley): Policies must be in place by September 30th.
There are also many other private products that can be added to enhance your base policy. To learn more about those products and how to maximize your coverage, please feel free to contact our office.
