MPCI is insurance designed to protect against losses in yields. MPCI is also known as APH (Actual Production History) insurance. MPCI makes indemnity payments when an insurance unit of the farm's actual yield is below a yield guarantee. Unlike CRC, the current market price (whether locally or on the CBOT) has no bearing on MPCI indemnity payments.

Yield guarantee under MPCI
The yield guarantee equals the (APH) yield times a farmer-chosen coverage election. Coverage elections range from 50 to 75 percent of the APH yield in most counties. In some counties, yield elections range up to 85 percent of APH yield. All acres of the insured crop in the county must be insured at the same level of coverage. You may have a different level of coverage if it is for a different crop, or on the same crop if grown in a different county.

Corn having a 150 bu. APH yield has a 105 bu. yield guarantee when a 70 percent coverage level is chosen (see Figure 1).

 Figure 1. Per Acre MPCI Yield Guarantee.

Indemnity payments under MPCI
MPCI makes indemnity payments when actual yield is below the yield guarantee. The payment equals the yield shortfall times the MPCI price election. In the following examples, an MPCI price election of $2.25 for corn is used. You may select a price election ranging from 60% to 100% of the a "market" price announced annually by the Risk Management Agency of the USDA. Nearly all of our clients choose 100%, or the maximum price election allowed for the insured crop.

An example of indemnity payments is given for corn having a 150 bu. APH yield. At 70% coverage, the yield guarantee is 105 bu. For a 50 bu. actual yield, the yield shortfall is 55 bu. (105 bu. yield guarantee – 50 bu. actual yield). Multiplying the 55 bu. shortfall times the $2.25 indemnity price gives the indemnity payment of $123.75 per acre.

Indemnity payments increase for lower actual yields (see figure 2).

Based on information in Figure 1.

Insurable units under MPCI
Insurance units available under CRC are basic, optional, and enterprise units

For a complete discussion of units, see Iowa State University Extension, Actual Production History and Insured Units, March 1999, http://www.exnet.iastate.edu/Publications/FM1860.pdf.

Additional coverage under MPCI
MPCI also provides coverage for losses causing the replanting of the insured crop, as well as the inability to plant the insured crop due to insurable causes.

MPCI premiums
Per acres premiums will depend on the county of the insured crop, units insured, the crop’s APH yield, the price election chosen, and the selected coverage level. Higher coverage levels result in higher premiums.

Download Software
Insurance Payment Calculator: The Insurance Payment Calculator compares gross revenue under alternative insurance products. It allows users to see how insurance indemnity payments and gross revenue varies under differing harvest prices and yields

Adobe Acrobat Reader : This program is needed to view many of the documents you will encounter on the internet that has a file format ending in "pdf".

Other information
Iowa State University Extension, Multiple Peril Crop Insurance, March 1999.

CIS HOME || GPS MAPS || SOFTWARE || HARDWARE || ABOUT US || LINKS || CONTACT US