Key Takeaways
- Revenue Protection locks in the higher of projected or harvest price — you're covered even if prices recover
- Yield Protection uses only the projected price — if prices drop at harvest, your indemnity is lower than with RP
- RP with Harvest Price Exclusion (RP-HPE) is a middle option — lower cost than full RP, uses projected price only like YP
- Most Corn Belt farmers choose RP for corn and soybeans
- YP may make sense when commodity prices are stable and you want to minimize premium cost
The Core Difference: What Happens When Prices Drop
The fundamental distinction between RP and YP only matters in one scenario: when commodity prices at harvest are lower than they were at planting. In all other scenarios — good yields and prices, or yield loss with stable prices — both policies pay very similarly.
Here's the critical insight: RP uses the higher of the projected price or the harvest price to calculate your indemnity. YP uses only the projected price. If corn falls from $5.00 at planting to $4.00 at harvest, RP calculates your guarantee using $5.00. YP also uses $5.00 in its revenue guarantee calculation — but if you have a yield shortfall, the loss is measured using the lower $4.00 harvest price, which means a smaller indemnity check.
Full Comparison: RP vs. RP-HPE vs. YP
| Feature | Revenue Protection (RP) | RP with Harvest Price Exclusion | Yield Protection (YP) |
|---|---|---|---|
| Covers yield loss | Yes | Yes | Yes |
| Covers price decline | Yes | No | No |
| Price used for indemnity | Higher of projected or harvest price | Projected price only | Projected price only |
| Revenue guarantee set using | Projected price × APH × coverage level | Projected price × APH × coverage level | Projected price × APH × coverage level |
| Indemnity if yield falls AND price drops | Calculated using higher price — larger payout | Calculated using projected price — same as YP | Calculated using projected price — smaller payout |
| Premium cost | Highest | Medium | Lowest |
| % of farmers choosing (corn/soybeans) | ~65% | ~10–15% | ~20–25% |
| Best for | Most situations — especially volatile price environments | Stable-price crops with yield risk | When prices are unlikely to decline; budget-conscious |
How Revenue Protection Indemnity Is Calculated
Understanding the RP indemnity formula is the key to understanding why most farmers choose it. Here's a worked example for a corn producer:
RP Indemnity Example — Corn, 500 acres
1
APH yield: 200 bu/ac · Coverage level: 85% · Projected price: $5.00/bu
2
Revenue guarantee = 200 × 85% × $5.00 = $850 per acre
3
Actual harvest: 150 bu/ac · Harvest price: $4.00/bu
4
Actual revenue = 150 × $4.00 = $600 per acre
5
RP indemnity = $850 guarantee − $600 actual = $250 per acre × 500 acres = $125,000
RP indemnity payment:
$125,000
How Yield Protection Indemnity Works
Using the same scenario with YP, the calculation works differently:
YP Indemnity Example — Same Farm, Same Year
1
APH: 200 bu/ac · Coverage: 85% · Projected price: $5.00/bu
2
Yield guarantee = 200 × 85% = 170 bu/ac
3
Actual yield: 150 bu/ac (20 bu/ac shortfall)
4
YP indemnity = (170 − 150) × projected price $5.00 = $100/ac × 500 ac = $50,000
YP indemnity payment:
$50,000
The difference in this example: $75,000
RP paid $125,000. YP paid $50,000. The $75,000 difference comes entirely from RP using the $5.00 projected price (not the $4.00 harvest price) when calculating the revenue guarantee. In a year when prices fall AND yields fall — which often happens together — RP's advantage is largest.
Premium Cost Comparison
RP costs more than YP because it provides more coverage. The exact difference varies by crop, county, and coverage level, but for a representative 500-acre corn operation in central Illinois at 80% coverage:
| Policy Type | Estimated Gross Premium | USDA Subsidy (52%) | Farmer's Net Premium |
|---|---|---|---|
| Revenue Protection (RP) | ~$38,000 | ~$19,760 | ~$18,240 |
| RP with HPE | ~$31,000 | ~$16,120 | ~$14,880 |
| Yield Protection (YP) | ~$25,000 | ~$13,000 | ~$12,000 |
Illustrative estimates based on 2026 actuarial data for central Illinois corn. Actual premiums vary significantly by county, APH, and current commodity prices. Get a precise quote from your agent.
When to Choose Each Policy
Choose RP When...
- Commodity prices are volatile or uncertain
- You want full protection against both price and yield risk
- Your lender requires comprehensive coverage
- You're farming corn and soybeans in the Corn Belt
- You cannot absorb a large income shortfall in a down-price year
Choose RP-HPE When...
- You want to save some premium vs. full RP
- You price grain at planting (marketing contracts lock in price)
- Commodity prices are historically stable for your crop
- You want yield coverage without paying for full revenue protection
Choose YP When...
- Minimizing premium cost is a priority
- You're growing a crop where prices rarely decline at harvest
- You have forward contracts covering most of your expected production
- Local crop insurance agent recommends it for your specific crop/county
Talk to a Crop Insurance Agent About RP vs. YP
The right policy type depends on your specific crop, county, APH, and marketing strategy. A USDA-approved agent can run actual premium quotes for both options and help you decide.
Find an Agent at RMA →AcreCompass does not sell crop insurance and earns no commission on policy purchases.
Frequently Asked Questions
What is the "projected price" and how is it set?
The projected price is set by RMA based on average futures prices during a discovery period before planting. For corn and soybeans in the Corn Belt, the projected price is derived from the average December corn futures and November soybean futures prices during the month of February. It's published by RMA around March 1 each year. The harvest price is based on October futures prices for corn and soybeans, published in November.
If harvest prices rise above projected, does RP pay more?
Yes. RP uses the higher of the projected or harvest price. If the harvest price is higher than the projected price and your yields are below your guarantee, RP recalculates your revenue guarantee using the higher harvest price. This means RP pays more when prices rise and you have a yield shortfall — because your actual yield is worth more per bushel than the projected price, making the revenue shortfall larger. This is sometimes called the "upward price revision" feature of RP.
Can I switch between RP and YP each year?
Yes. You can change your policy type each year during the sign-up period before the sales closing date. You are not locked into the same policy type indefinitely. Many farmers choose the same policy year after year for consistency, but there is no requirement to do so. Policy changes must be submitted to your agent before the sales closing date (typically March 15 for Corn Belt crops).
Does my lender care which policy I choose?
Lenders typically specify a minimum coverage level (often 65–75%) but rarely specify RP vs. YP. FSA farm loans may require "an appropriate level of crop insurance" without specifying the type. However, some agricultural lenders strongly encourage RP because the revenue protection reduces their collateral risk. Check your loan agreement for specific requirements and discuss with your lender if you're considering YP.
What if I have a forward contract at a higher price — does RP still make sense?
If you've forward-contracted a significant portion of your expected production at a price above current projected prices, the price-decline protection of RP is partially redundant for contracted bushels — you've already locked in your price. In that case, RP-HPE or YP may be more cost-effective since your price risk on contracted bushels is already hedged. Discuss this scenario with your crop insurance agent, who can model the outcomes for your specific contract and APH situation.
How does RP compare to buying a put option on futures?
Put options and RP both protect against price declines, but they work differently. A put option gives you the right to sell at a specific price and pays when futures prices fall — it doesn't depend on your actual yield. RP protects revenue (price × yield) and only pays when actual revenue falls below your guarantee. The USDA premium subsidy on RP makes it much cheaper than the equivalent protection from put options alone. Most sophisticated grain operations use both: RP as the insurance foundation and futures/options strategies on top for additional price management.
Sources
- USDA Risk Management Agency — Policy Types and Coverage
- USDA RMA — Summary of Business by Program, 2024 Crop Year
- USDA RMA — Revenue Protection Policy Provisions
- University of Illinois Extension — Crop Insurance: RP vs. YP, 2025