United States      Risk           Research         P.O. Box 419293
March 3, 1998
     
     
INFORMATIONAL MEMORANDUM: R&D-98-008
          
TO:      All Reinsured Companies
         All Risk Management Agency Field Offices
     
FROM:    Tim B. Witt      /s/ Tim B. Witt
         Deputy Administrator
     
SUBJECT: 1998 Projected Price Announcements for Income Protection (IP) 
         and Revenue Assurance (RA), and Base Price Announcements for 
         Crop Revenue Coverage (CRC)
     
     
                      Crop Revenue Coverage 
     
The 1998 base prices for CRC Corn, Grain Sorghum, Soybeans, and Spring
Wheat in counties with a March 15 sales closing date are as follows:
     
          Corn             95 percent          $2.70 per bushel
                           100 percent         $2.84 per bushel

          Grain Sorghum    95 percent          $2.57 per bushel
                           100 percent         $2.70 per bushel
     
          Soybeans         95 percent          $6.31 per bushel
                           100 percent         $6.64 per bushel
               
          Spring Wheat     95 percent          $3.72 per bushel
              

                  
                       Income Protection
     
The 1998 projected prices for IP Corn, Grain Sorghum, Soybeans, and
Wheat in counties with a March 15 sales closing date are as follows:
     
                      Corn: $2.84 per bushel
               
             Grain Sorghum: $2.84 per bushel    
               
                  Soybeans: $6.64 per bushel
     
                     Wheat: $3.55 per bushel
     
     

                        Revenue Assurance
     
Projected county prices for RA Corn and Soybeans in Iowa are derived by
subtracting county-specific adjustment factors from the simple average
of the final closing daily settlement prices in February of the Chicago
Board of Trade (CBOT) December corn futures and November soybean futures
contracts for the current year.  County specific adjustment factors are
contained within the actuarial materials; therefore, no adjustment
factor received from any other source may be used. 
The CBOT averages from which the 1998 projected county prices will be
derived are as follows:
     
                      Corn: $2.84 per bushel
 
                  Soybeans: $6.64 per bushel
     
     
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 January contained a preliminary estimate of this
variable.  The final values for 1998 are:
     
                            Corn: 0.21
                        Soybeans: 0.18
     
These final values must be used to calculate the correct amount of
premium for quoting, billing and processing purposes.