Content ID

335741

Corn revenue protection just got more important to your 2022 bottom line

Provide actual crop production numbers to insurance agent immediately after harvest; Note indemnities typically paid in income tax year received

The final harvest prices for crop insurance for the 2022 crops are $6.86 per bushel for corn and $13.81 per bushel for soybeans, respectively. These are the average futures prices for December CME corn and November CME soybean contracts during the month of October. The corn harvest price is higher than the spring projected price of $5.90 per bushel, however the soybean harvest price is lower than the projected $14.33 per bushel. 

For corn, the revenue guarantee will be adjusted higher for farmers who purchased revenue-based crop insurance with the Harvest Price Option (HPO). For soybeans, since the spring projected price is higher than the harvest price, the revenue guarantee would remain the same.

These prices and the farm's actual production are the final pieces in determining the potential crop insurance indemnity claim for both 2022 corn and soybeans. 

Most farmers purchase a revenue policy at higher levels of coverage (80% or 85%). Farmers experiencing significant yield losses this fall — below their farm’s Actual Production History (APH) — should keep good production records, and report these numbers to their crop insurance agent immediately upon completion of harvest.

Since corn and soybean yields will vary across farms, and many insured farmers use enterprise unit coverage, crop insurance indemnity claims will also vary. Farmers should provide their crop insurance agent with actual production by unit so they can determine the potential for an indemnity claim. 

That same information will be used to update the farm’s APH records in determining 2023 crop guarantees and premiums.

Premiums are past due

Any crop insurance premium not paid by the Oct. 1 deadline may have interest added. The terms of the policy are usually a 15% annual percentage rate charged.

In many cases, the completion of harvest is the first signal that coverage has ended for the insured crop. Therefore, a notice of any potential loss must be filed within 15 days of harvest completion for the unit. 

For crops that have revenue protection (RP) coverage, and there is no production loss, but a potential revenue loss exists, notice must be provided no later than 45 days after the harvest price is released for the crop.

Timely crop insurance reminders

Good communications will be critical as harvest wraps up and production evidence is submitted. Consider these seven harvest-time crop insurance reminders when working with your crop insurance agent.

  1. Report production as soon as harvest is completed to identify potential losses so your agent can prepare a loss claim estimate.
  2. Contact your agent immediately upon discovery of crop losses.
  3. Before feeding grain to livestock, request bin measurements.
  4. If you’re going to have a late harvest or unharvested crops, discuss your options.
  5. The drought damage might have created crop quality issues in some fields. Discuss those quality concerns and question how the policy will handle them.
  6. Talk to your tax advisor about the impact of receiving an indemnity payment and the year it is taxable. An IRS form for annual deferral can likely be utilized. 
  7. Make sure you pay your premium in a timely fashion and avoid interest charges.

Steve Johnson is a retired Iowa State University Extension farm management specialist. He can still be reached at sdjohns@iastate.edu.

Read more about
Loading...

Tip of the Day

Music is calming

AATF department logo Leave a weather monitor or radio turned on 24-7 – with the volume up – in your calving barn during calving season.

Talk in Marketing

Most Recent Poll

Will you have enough on-farm storage for harvest?

I just want to see the responses
45% (25 votes)
Yes
38% (21 votes)
No, it’s going to be a bin-buster
7% (4 votes)
Maybe, depending on yields
5% (3 votes)
No, I am looking at new bins or temporary storage
4% (2 votes)
Total votes: 55
Thank you for voting.