INFORMATIONAL MEMORAMDUM:  R&D-97-017
     
TO:       All Reinsured Companies
          All Risk Management Field Offices
          FSA Headquarters, Program Delivery & Field Operations -
          Information Only
     
FROM:     Tim B. Witt
          Acting Deputy Administrator
     
SUBJECT:  1997 Income Protection, Crop Revenue Coverage, and Revenue 
          Assurance Price Announcements for Corn, Wheat, Grain Sorghum,
          and Soybeans and Implicit Volatility of Prices for Corn and
          Soybeans - Revenue Assurance
     
     
The following prices are approved for these plans of insurance and crops
with March 15 sales closing dates.
                        
                            Income Protection
     
Corn: The 1997 projected price for Income Protection (IP) Corn is $2.73
per bushel as defined in the Corn crop provisions.
     
Wheat:  The 1997 projected price for Income Protection (IP) Wheat is
$3.52 per bushel as defined in the Wheat crop provisions.
     
Soybeans: The 1997 projected price for Income Protection (IP) Soybeans
is $6.97 per bushel as  defined in the Soybean crop provisions.

Grain Sorghum: The 1997 projected price for Income Protection (IP) Grain
Sorghum is $2.46 per bushel as defined in the Grain Sorghum crop
provisions.
     
                          Crop Revenue Coverage
  
Corn:  The 1997 base price for Crop Revenue Coverage (CRC) Corn is $2.59
per bushel as  defined in the CRC Commodity Exchange Endorsement.
     
Grain Sorghum:  The 1997 base price for Crop Revenue Coverage (CRC)Grain
Sorghum is $2.46 per bushel as defined in the CRC Commodity Exchange
Endorsement. 

Spring Wheat:  The 1997 base price for Crop Revenue Coverage (CRC)
Spring Wheat is $3.43 per bushel as defined in the CRC Commodity
Exchange Endorsement.
     
Soybeans: The 1997 base price for Crop Revenue Coverage (CRC) Soybeans
is $6.62 per bushel as defined in the CRC Commodity Exchange
Endorsement.

                        Revenue Assurance
     
Corn:  According to the Revenue Assurance (RA) Corn crop provisions, the
first step in determining the projected county price for corn is "to
calculate the simple average of the final closing daily settlement
prices in February on the Chicago Board of Trade (CBOT) December corn
futures contract . . . for the current crop year."  This simple average
is $2.73 per bushel.
     
Soybeans:  According to the Revenue Assurance (RA) Soybean crop
provisions, the first step in determining the projected county price for
soybeans is "to calculate the simple average of the final closing daily
settlement prices in February on the Chicago Board of Trade
(CBOT) . . .November soybean futures contract for the current crop
year."  This simple average is $6.97 per bushel.
     
Note:  Projected county prices are derived by subtracting county-specific
adjustment factors from the simple average of the final closing
daily settlement prices.  County specific adjustment factors are
contained within the actuarial materials; therefore, no adjustment
factor received from any other source should be used.
     
Implicit Volatility of Prices: One variable required to calculate the
premium for Revenue Assurance is the implicit volatility of prices. 
This variable measures the risk of price changes.  The actuarial
materials released in February contained a preliminary estimate of this
variable.  The final values for 1997 are:
     
                              Corn: 0.19
                            Soybeans: 0.16
     
These final values must be used to calculate the correct amount of
premium.