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Crop insurance changes coming for 2009 crop

Agriculture.com Staff 02/12/2016 @ 2:23pm

Sharpen your pencil: It's almost crop insurance-filing time. And, this year, it may take a whole different set of numbers to make sure your crops are covered.

Indemnity prices for corn and soybeans (for yield-based policies) are high for '09 -- not quite as high as last year -- at $4 and $9.90 per bushel, respectively. Prices for revenue-based insurance policies will be nailed down at the end of this month.

But, input costs and other expenses to get the '09 crop raised are also high, meaning a higher percentage of coverage may be necessary to afford the same protection in the event insurance payments become an income source. Add to that a few changes to federal crop insurance this year, and it will be important to do your homework before nailing down your policies.

"Producers should carefully calculate their insurance coverage needs before meeting with their crop insurance agent this year," says Iowa State University Extension economist William Edwards. "Higher input costs and lower indemnity prices mean farmers will have to choose a higher percentage level of coverage to protect their costs of production."

In 2008, according to the insurance industry website www.cropinsuranceinamerica.org, 272 million acres of farmland nationwide were protected through the federal crop insurance program. Crop insurance payouts were big in parts of the country last year. In Iowa, for example, flooding caused many losses. Then, grain prices fell, altering the ratio between premiums and amounts paid.

"As of late January, insurance companies had paid out an average of $20.47 per acre for corn losses and $24.52 per acre for soybean losses," Edwards says. "Payments amounted to 90% of the premiums paid by Iowa farmers for corn, and 139% of the premiums paid for soybeans."

The amount paid to farmers depended on the policy type, Edwards adds. Revenue Assurance (RA) policies ended up paying out more than Crop Revenue Coverage (CRC) plans because the latter policy included "price movement limits" of $1.50 per bushel for corn and $3 per bushel for soybeans from February until harvest. That will change for this year's crop.

"The downward limits have been removed for 2009, and an upward limit equal to twice the February price has been established for both CRC and RA insurance," Edwards says.

Sharpen your pencil: It's almost crop insurance-filing time. And, this year, it may take a whole different set of numbers to make sure your crops are covered.

If you planted hybrids containing genetics like YieldGard, Herculex or Agrisure, you may have taken advantage of the Biotech Yield Endorsement program, which netted eligible farmers a 13% average discount in 2008. That plan will be in effect again for the 2009 crop, Edwards says, with a larger geographic area included. Make sure you're in the eligible area, are planting enough of the required genetics and have the right policy type in place before you count on the discount this year.

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