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Crop insurance harvest prices nailed down
If you're filing a crop indemnity claim for federal crop insurance, Friday morning's arrival brings you some important information.
The Fed has nailed down the final harvest prices for corn and soybeans that, though still awaiting USDA Risk Management Agency verification, will ultimately become the bases for crop insurance indemnity claims on revenue policies. The final price for corn, based on the average price for the December CME Group futures contract during the month of October, is $4.39/bushel. For soybeans, the price -- the average for the November futures contract during October -- is $12.87.
"This and the farm’s actual 2013 yields are the final pieces in determining the potential crop insurance indemnity claim for both corn and soybeans. Those final harvest prices suggest that crop insurance revenue policies on corn will trigger indemnity payments this year. This is especially true if the insured purchased a revenue policy at higher levels of coverage (80 or 85 percent)," according to Iowa State University Extension farm management specialist Steve Johnson. "Farmers experiencing yields below their Actual Production History (APH) should keep good production records and report these to their crop insurance agent immediately upon completion of harvest."
Yields will, Johnson admits, have to see a pretty steep drop in order to net an indemnity payment like this; "To trigger and indemnity payment in soybeans, the actual yield will need to fall at least 15% below the APH for an 85% level of coverage. So a substantial yield loss on soybeans will have to occur before crop insurance indemnity payments would be triggered," he says.
And, just because these price levels have been established, that doesn't mean payments are going to be consistent or even, Johnson adds. That's why it's important to stay in touch with your crop insurance agent if you feel like you're on the verge of a payment.
"Since corn and soybean yields will vary across farms and many insureds use enterprise unit coverage, crop insurance indemnity payments will also vary. A farmer should contact their crop insurance agent with their estimated yields to determine the potential for an indemnity claim," he says. "Keep good production records and report the final production immediately upon completion of harvest. This will help expedite an indemnity claim for 2013 and help determine the APH for 2014 crop insurance decisions."
Crop Insurance Harvest Price Update