Corn and soybean crop insurance guarantees have dropped, just in time for the spring planting season that’s right around the corner. A DTN report says that means farmers get less protection against low prices in their revenue policies this year.
Guarantees are $3.88 a bushel for corn and $9.17 for soybeans. Those are down 12 and 37 cents respectively from last year. Officials come up with the spring guarantee by averaging the daily close of the December 2020 corn and the November 2020 soybean futures contracts through the month of February.
It was poor timing as commodity prices dropped during the final week of February as global markets responded negatively to the spread of the coronavirus.
“You’ve got a lower benchmark, a lower revenue guarantee, so you’ll have less coverage than you would have otherwise,” says Jim Mintert, director of the Center for Commercial Agriculture at Purdue University. “From a farmer’s perspective, it’s a huge downer that the market collapsed at the end of February rather than early March.”
Depending on the volatility of some factors included in the price guarantee calculations, lower guarantees could lead to lower premiums.