How is Trigger Revenue calculated?

Trigger Revenue is calculated as the expected county revenue multiplied by the coverage percent chosen by the farmer. This calculation is essential for determining the threshold at which a farmer may receive indemnity payments in the event of a revenue loss.

The expected county revenue is typically derived from a combination of the average yield and the price of the crop, representing the anticipated income for a given area. The coverage percentage that the farmer opts for plays a crucial role in the insurance policy, as it dictates the proportion of the expected revenue that will be guaranteed. By multiplying these two factors, farmers can establish a baseline of revenue that helps protect against variations in both crop yield and market prices.

In contrast, the other options do not adequately reflect how Trigger Revenue is calculated in a manner consistent with crop insurance policies. For instance, while county yield multiplied by crop price may seem relevant, it does not account for the chosen coverage percent, which is a critical part of determining the trigger. Similarly, iterating past yields or using last year’s production do not provide the necessary context for the expected revenue calculation in the framework of crop insurance.