Protection Factor

• The  Protection Factor gives the producer the ability to insure up to 50% more revenue  without having to produce an additional 50%  of milk/revenue.
• The range is from 1 to 1.5 in .05 increments, the level chosen will multiply any indemnity by that amount as well as any premium due.
• The protection factor can be viewed 3 ways
  • 1) Help protect against large deviations between the producers milk/per cow (yield) and the state average yield
  • 2) Powerball: subsidized way to insure an extra 50% of revenue/production without having to produce it
  • 3) Flexibility: use the protection factor at 1.5 to get to the amount of milk you want covered. Giving the producer more room to easily produce the declared covered milk while maintaining the ability to add extra coverage and/or get a 150% hedged.