Katherine's Story
It’s not just crop insurance; It’s part of the team.
Fixed Cost Margin Coverage allowed Katherine to add gross margin coverage to her existing risk management plan, resulting in a $1,275,000 claim.
CASE STUDY
Challenges
Dry
Low Markets
Tough Growing
Coming off a weak 2018 in Southern Alberta, Katherine and her family were eager to get back on track with their growth and profitability plans. They knew this would mean an aggressive agronomic plan, strategic investments, and a hard push all season long.
The family was up to the challenge, but with so much uncertainty in their growing region and in grain markets, they wanted more protection than their current mix of insurance products could provide.
Fixed Cost Margin Coverage adds protection at the top
Referred by a friend to a Global Ag Risk Solutions Advisor, Katherine learned that there was a way to add the gross-margin component of the innovative production cost insurance solution to her existing risk management portfolio.
By purchasing a fixed-cost margin coverage policy from Global Ag Risk Solutions, Katherine was able to add protection at the top (her gross margin) while keeping her hail insurance and traditional crop insurance from AFSC to protect the bottom (her input costs).
Katherine selected $180/acre in gross margin coverage. She’d be counting on her other insurance products to cover her input costs, but she started seeding knowing that she’d be covered for up to $180/acre in revenue after her break-even point.
Katherine's Coverage
Gross margin coverage:
$180
Actual revenue/acre:
$150
Actual inputs/acre:
-$120
Actual gross margin/acre:
$30
Claim payout/acre
$150
Acres:
8,500 x $150
Total claim:
$1,250,000
Katherine’s family received a claim of $1,250,000, and they didn’t have to let go of their existing insurance plan.
It was a smart move.
2019 turned out to be even worse than 2018 in Katherine’s area between drought, insect pressure and inconsistent markets – and Katherine’s farm was in a claim position.
Gross margin coverage from her Global Ag Risk Solutions policy was able to cover the gap between her expected gross margin - $180/acre – and her actual gross margin of just $30. Katherine’s family received a claim of $1,250,000, and they didn’t have to let go of their existing insurance plan.
Production Cost Insurance felt like part of the team – helping the family put 2019 in the rear-view mirror and start looking ahead to the next season.