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Production Guarantee |
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A Crop Insurance contract guarantees a yield based on your long-term individual yield and coverage option selected. This guarantee appears on your Statement of Insurance in kilograms and bushels for most crops, and kilograms and pounds for those crops typically marketed in pounds.
Yield-loss payments are based on the shortfall between the production guarantee for all acres of the insured crop and the total net harvested production plus any appraisals applied to acres put to any use other than harvesting. The insured price does not guarantee market price.
| Example |
| You have 70% coverage on 100 acres of HRSW and the long-term individual yield is 708 kg/acre (26 bushels/acre).
Your production guarantee is 708 x 70% = 496 kg/acre (18.2 bushels/acre)
Your total production guarantee is 496 x 100 acres = 49,600 kg (1,822 bushels)
In the fall, you harvest 29,937 kg (1,100 bushels). To calculate your yield loss:
49,600 kg (total production guarantee) - 29,937 kg (actual harvested production)
=19,663 kg yield loss
Your yield-loss claim payment is 19,663 x $0.195 ($/kg insured price) = $3,834.29 |
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Quality Coverage |
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In addition to production, quality is also considered when calculating yield loss. A designated grade has been established for each crop based on the historical average grade. When the grade of your harvested production is lower than the designated grade due to an insurable peril, that production is adjusted by a quality factor. That adjusted production is used in calculating your claim.
Quality factors are determined by comparing the price of the harvested grade to the price of the designated grade. The prices used to calculate quality factors are the post-harvest selling prices established through a survey of grain companies, the Canadian Wheat Board and processors from across Saskatchewan. Once these market prices are available, quality factors will be listed online.
| Continuing with the previous yield loss example, the standard grade for HRSW is #2 CW. You harvest CW Feed.
The quality factor is calculated as:
Price for CW Feed ÷ Pool Return Outlook of #2 CW
= $1.66/tonne ÷ $200.00/tonne
= 0.83
Harvested production after quality factors is 29,937 kg x 0.83 = 24,848 kg
To calculate your yield loss after quality factors are applied:
49,600 kg (production guarantee) - 24,848 (actual harvested production after quality adjustment) = 24,752 kg yield loss
The incremental payment is:
24,752 kg loss after quality - 19,663 kg loss before quality = 5,089 kg difference
You would be eligible for a further payment of 5,089 kg x $0.195/kg = $922.36
Total payment = $3,834.29 + $922.36= $4,826.65 |
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