Gibson Insurance Group

The Risk Management Specialist

Revenue Price Option with Market Coverage Option (RPO-MCO) is another private product through crop insurance that could be of interest this upcoming year. This product offers three ways to increase your spring bushel price guarantee. The first option is to increase your spring coverage price up to $0.25 higher on corn and $0.60 higher on soybeans than the established base price. The second option allows you to pick any CME daily closing price up until March 15th and make that your price guarantee for the spring. This allows you to watch the daily markets and if you see a price you like, act on it. The third option is to add the discovery period of May, June, July, or a combination of these months. This allows you to capture potential higher future prices in each of these 3 months. With RPO- MCO you can use these options in a variety of ways to raise your spring guarantees up to $1.00 on corn and $2.00 on soybeans over the base spring price while still guaranteeing your final price won’t come in lower than $0.25/corn and $0.60/soybeans over the set spring price.

When it comes to looking at how to increase my overall guarantees I find RPO-MCO to be a more cost-effective solution for my operation rather than increasing my coverage level from 75% to 80%. This past year I combined 2 RPO-MCO options ($0.25/$0.60 over spring price and adding price discovery to May-July). The premium prices will vary for  every operation, but current average quotes for the highest coverage possible with all 3 options are $30/corn and $20/soybeans. These prices can add a minimum of $31/corn and $26/soybeans guarantee per acre while giving the potential to add up to $120/corn and $88/soybeans.

While there are many ways to evaluate these premiums and increased guarantees there a few important things to note. Since this is a private product there is a region wide acre cap in place, so once that cap is reached, we will no longer be able to sell the product. Last year, we reached this cap fairly early. Secondly, the quotes on this product change daily based on CME daily prices and volatility and are only good for a small window of time. If you see a CME price you like, let us know.

If RPO-MCO is a product you are interested in learning more about and seeing the price options for your operation give us a call today. We are happy to work with you on daily quotes until you find a price you like.

RPO-MCO is available now to lock in these current prices. Please do not wait to contact us if you are interested in this product!

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