On average, the majority of corn, cotton and soybean crop insurance revenue protection policyholders purchase the harvest price option. Each year, farmers pay billions of dollars in premiums for this feature that may provide additional financial risk coverage in the event of crop loss. The harvest price option provides protection on yield declines at the higher of the spring planting price or the price during harvest.
Spring prices for corn and soybeans are determined by averaging the new-crop futures contract settlement prices (December for corn and cotton and November for soybeans) during the month-long February price discovery period. Harvest prices are determined by averaging the same new-crop futures during the month-long October price discovery period. The spring prices announced in March 2017 were $3.96 per bushel, 74 cents per pound and $10.19 per bushel, respectively, for corn, cotton and soybeans.
At the beginning of November, the Agriculture Department’s Risk Management Agency announced the harvest prices for corn, cotton and soybeans at $3.49 per bushel, 68 cents per pound and $9.75 per bushel, respectively. Harvest prices for corn and soybeans are unchanged from 2016 levels. For corn, the harvest price was 47 cents per bushel below the spring price and marks the fifth consecutive year that harvest prices have been below the spring prices established in February.