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GRIP is coverage based on county NASS yields. The advantages are low overhead, high subsidy, high price. These advantages allow GRIP to return more to the producer (higher loss ratio) over time. When using GRIP, you should use as high a level as possible, and are able to reduce premium by reducing the price, instead of only by reducing coverage level.
Disadvantages are you must buy hail, possibly wind coverage, and not face other localized perils that may not affect the county. The key to GRIP is that your yields trend with the county. Not that they are higher or lower than the county, but that they trend with the county.
Attached is an example using Dane county WI NASS yields, along with past beginning and ending prices. To really evaluate GRIP, you would place our yields in the right APH column, to compare results of traditional coverage with GRIP, and to determine if your yields trend with the county yields.
The first three examples use GRIP, two at the 90% level, with one using 100% price, the next using 70% price, to get to a premium similar to 75% CRC (right coverage column).
Yes I am an agent. I live and farm in Nebraska, and have customers in several states.
Rob Heyen
Edited by robheyen 3/7/2007 22:07
Attachments ---------------- Dane WI CRN.pdf (73KB - 679 downloads)
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