Revenue Assurance (RA) provides protection not only against production shortfalls but also provides revenue protection for crops by establishing a dollar guarantee based on the applicable futures market exchange. In states with a March 15 sales closing date, RA uses the average of the Chicago Board of Trade settlement prices during February for the December corn contract and the November soybean contract to establish a "Base Price". Additionally, a "Harvest Price" is established by averaging the CBOT settlement prices during November for the December corn contract and during October for the November soybean contract. Two types of RA are available: with harvest option or without harvest option. With the harvest option, indemnities are computed based on the higher of the Base Price or the Harvest Price. Unlike CRC, there is no limit on the increase or decrease between base and harvest prices.

Examples: RA with harvest option

Corn		120 bushel APH	70% RA coverage
RA Base Price:  $2.40/bu. X 84 bu. guarantee = $201.16 minimum guarantee
RA Harvest Price:  $3.00/bu.	Harvest guarantee = $252.00 	
Harvested yield = 70 bu./acre
Indemnity = $42.00/acre   (14.0 bushels X $3.00/bu. harvest price)

RA Harvest Price = $2.00/bu.  	Minimum and Harvest guarantee = $201.16
Harvested yield = 90 bu./acre
Indemnity = $21.16/acre  (Minimum guar. of $201.16 - harvest revenue of $180.00)

Examples: RA without harvest option

Corn		120 bushel APH	70% RA coverage
RA Base Price:  $2.40/bu. X 84 bu. guarantee = $201.16 revenue guarantee
RA Harvest Price:  $3.00/bu.
Harvested yield = 70 bu./acre     Harvest revenue = $210.00 (70 bu. X $3.00/bu.) 
No indemnity:  Harvest revenue exceeds revenue guarantee

RA Harvest Price = $2.00/bu.  	
Harvested yield = 90 bu./acre
Indemnity = $21.16/acre  (Revenue guar. of $201.16 - harvest revenue of $180.00)

The use of RA with harvest option provides valuable protection to a marketing plan by enabling producers to take advantage of early pricing opportunities. Policyholders can forward contract grain knowing that if they harvest less bushels than they have forward contracted they will be paid replacement cost for those bushels. This provides safety as long as the number of forward contracted bushels never exceeds the number of bushels guaranteed under their RA policy.

CropRisk always recommends the use of a revenue type of crop insurance to back up our marketing plans. CropRisk does not recommend RA without the harvest option as a back-up to a marketing plan.