Crop Insurance Price Guarantees Higher in 2017 – Premium Increases Likely
As the March 15th crop insurance deadline is fast approaching for corn and soybeans, what should we be considering? The 2017 projected price for corn is $3.96 per bushel with a volatility factor of 0.19. This is a $0.10 increase in the spring price guarantee from 2016. The increase in the volatility factor from 0.17 in 2016 to 0.19 in 2017 combined with a slightly higher spring price guarantee will likely result in slightly higher premium prices for coverage in 2017.
The soybean spring price guarantee for 2017 is $10.19 per bushel with a volatility factor of 0.16. This is a $1.34 increase from the 2016 projected price of $8.85. Additionally, the volatility factor increased from 0.12 in 2016 to 0.16 in 2017. With the significant increase in the spring price guarantee and an increase in the volatility factor, it is likely that most producers will see moderate increases in premiums for soybean crop insurance in 2017.
Projected prices inform the decisions regarding guaranteed revenue based on future prices, they do not however reflect local basis. The “iFarm crop insurance premium calculator” can be used to estimate a customized crop insurance premiums, as well as comparing revenue and yield guarantees across all available crop insurance products and elections for individual farm cases. This calculator can be found at: http://farmdoc.illinois.edu/cropins/
Producers are urged to contact their local crop insurance agents to get specific quotes for their farm using their own farm yield history. Be sure to make contact with your agent prior to the sign-up deadline of March 15th.
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