The fall crop insurance price is based on the average price of December corn futures during the month of October. As Randy Boberg, with Boberg Crop Insurance, explains, this fall’s price was much lower that the spring price and almost half of what it was a year ago, “The year’s harvest price was set at $4.39 which was down from the spring base price of $5.65 and well below last fall’s price of $7.50.” As Boberg told HAT, this lower price will make more farmers eligible for a claim this fall, “If you had a farm with a 150 bpa average and you took out an 80% coverage revenue protection policy, you would have a 120 bpa guarantee, this would give you a trigger yield of 120 bpa in order to claim a loss. But with this lower price, your trigger yield goes up to 154 bpa.” He said growers can harvest more than their guarantee and still be eligible for a claim because of the lower price.
According to Boberg, this may also provide some guidance on what kind of coverage growers should consider for next year, “If this price does not recover significantly by next February when the base price will be set for 2014, farmers will be looking at a lot lower guarantee.” In other words, farmers will not be able to guarantee as many dollars per acre as they have the past several years. As for soybeans, the fall price did not change at all, “This is the first time the base price and the harvest price have been exactly the same: $12.87.”
For more information, contact your local crop insurance provider.