Cornbelt: February Matters in Terms of Revenue-Based Crop Insurance – DTN

corn yield
Photo by Debra L Ferguson - AgFax Media

The month of February is important for growers in the key Corn Belt states who purchase revenue-based crop insurance policies. It’s when the projected prices for those policies are set.

During February, DTN will post a running tally of the December corn, November soybean and September Minneapolis wheat futures averages in Ag News.

The running average as of 02/21/18: $3.95 per bushel for corn, $10.11 per bushel for soybeans and $6.31 for HRS wheat.

2018 Dec Corn Nov Beans Sep HRS
1-Feb $3.9325 $10.0450 $6.2850
2-Feb $3.9250 $9.9900 $6.2775
5-Feb $3.8950 $9.9150 $6.2525
6-Feb $3.9350 $10.0550 $6.3000
7-Feb $3.9475 $10.0050 $6.3675
8-Feb $3.9500 $10.0450 $6.3775
9-Feb $3.9225 $10.0000 $6.3025
12-Feb $3.9700 $10.1425 $6.3775
13-Feb $3.9600 $10.1925 $6.3200
14-Feb $3.9650 $10.2000 $6.3150
15-Feb $3.9750 $10.2375 $6.3375
16-Feb $3.9700 $10.2200 $6.3100
20-Feb $3.9600 $10.2500 $6.2775
21-Feb $3.9650 $10.2800 $6.2900
AVG $3.95 $10.11 $6.31
2017 $3.96 $10.19 $5.65

You can also check out a running tally of RMA’s harvest prices and prices recently in discovery here.

Revenue policies with harvest-price protection cover losses caused by a difference in the harvest price (determined in October) from the projected price (determined in February). They also cover revenue losses in the event prices tumble between planting and harvest, as they did for corn in 2008.

For producers in 31 states, the closing price of the December corn contract during each trading day of February is averaged to determine a revenue-insurance-projected price guarantee. The November contract closes are averaged during February for projected price for soybean revenue-based insurance contracts. The September Minneapolis spring wheat closes are averaged for wheat revenue insurance. States with earlier planting have their spring guarantees set at a different time.  

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“The amount of insurance protection is based on the greater of the projected price or the harvest price,” according to the Risk Management Agency’s website. “If the harvested plus any appraised production multiplied by the harvest price is less than the amount of insurance protection, the producer is paid an indemnity based on the difference.”

Revenue protection policies with harvest price exclusion insure based on the projected price only. “The amount of insurance protection is not increased if the harvest price is greater than the projected price,” RMA states.

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