Farm Profile
1
A diversified direct marketing
farm grows bedding plants, strawberries and a wide array of vegetables, and
also makes jams, jellies and pickles from products produced on farm. It also
sells gardening accessories and gift items at the farm stand. The farm store
opens year-round.
5 Year History of Allowable Annual Incomes/Sales (2000 - 2004)
| 2000 |
$90,000 |
| 2001 |
$105,000 |
| 2002 |
$115,000 |
| 2003 |
$130,500 |
| 2004 |
$145,000 |
| Average: |
$117,000 |
Expected Revenue for the Insurance Year - Expected Income and Insurable Revenue
Product |
Expected Income |
Insurable Revenue |
Note |
| Spring bedding plants produced |
$47,000 |
$47,000 |
Will be retailed at the farm stand |
| Tomatoes produced |
12,000 |
12,000 |
Will be retailed at the farm stand |
| Sweet corn produced |
12,000 |
12,000 |
Will be retailed at the farm stand |
| Pumpkins produced |
10,000 |
10,000 |
Will be retailed at the farm stand |
| Summer squash produced |
4,500 |
4,500 |
Will be retailed at the farm stand |
| Cucumber produced |
5,000 |
5,000 |
Will be retailed at the farm stand |
| Lettuce produced |
7,000 |
7,000 |
Will be retailed at the farm stand |
| Peppers produced |
5,000 |
5,000 |
Will be retailed at the farm stand |
| Winter squash produced |
5,000 |
5,000 |
Will be retailed at the farm stand |
| Fresh market beans produced |
5,000 |
5,000 |
Will be retailed at the farm stand |
| Mixed of vegetables produced |
5,000 |
5,000 |
Will be retailed at the farm stand |
| Strawberries produced |
25,000 |
25,000 |
Will be retailed at the farm stand |
| Fruit, vegetables and bedding plants purchased for resale |
15,000 |
8,500 |
Purchasing costs are expected to be $6,500 which is not insurable |
| Jams, jellies and other processed products produced on farm for sale |
8,000 |
4,000 |
Costs of processing including labor and materials are estimated to be $4,000 which is not insurable |
| Gift items and other merchandises purchased for resale |
15,000 |
0 |
Not insurable because not agricultural products |
| Total |
$180,500 |
$155,000 |
|
Premium Example (Estimated only) - for the 2006 Insurance Year
(Estimated Only. This could change depending on which county the farm is located in and what other crop insurance programs the farm might have.)
This farm has an Approved Adjusted Gross Revenue of $155,000.
|
Coverage
Level |
Payment Rate |
Liability($) |
Total
Premium ($) |
Premium
Subsidy (%) |
Premium
Subsidy ($) |
Farmer
Premium ($) |
Premium as
Percent of Liability (%) |
| |
|
65% |
75%
90% |
$75,563
$90,675 |
$1,437
$1,722 |
59%
59% |
$848
$1,106 |
$589
$706 |
0.8%
0.8% |
| |
|
75% |
75%
90% |
$87,188
$104,625 |
$2,616
$3,140 |
55%
55% |
$1,439
$1,727 |
$1,177
$1,413 |
1.3%
1.4% |
| |
|
80% |
75%
90% |
$93,000
$111,600 |
$3,535
$4,240 |
48%
48% |
$1,697
$2,035 |
$1,838
$2,205 |
2.0%
2.0% |
Loss and Payment Scenario (Estimated Only)
Assuming during the insurance year,
a rainy spring reduced the farm’s bedding plant sales, U-pick traffic and the
strawberry yield. Moreover, the over-abundant supply of sweet corn in the
summer resulted in lower prices. At the end of the insurance year, the farm
realized a total allowable revenue of $90,000.
The farm has an AGR-Lite policy of
80% coverage and 90% payment rate with a premium payment of $2,205.
- Approved Adjusted Gross Revenue is $155,000
- Coverage Level 80% (or loss/payment trigger) = $155,000 * 80% = $124,000
- Actual Allowable Revenue = $90,000
- Difference between coverage level and revenue realized = $124,000 - $90,000 = $34,000
- Payment Rate 90%
- Insurance Payout = $34,000 * 90% = $30,600
- Insurance Benefit/Premium Cost Ratio = $30,600/$2,205 = $13.88
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