by Emery Kleven
As the corn and soybean harvest wraps up for this year, producers are wondering if any 2016 crop insurance payments will be coming, given the lower crop prices this fall, especially on corn. The short answer is maybe. If there are payments, it would be more so for corn rather than soybeans. We’ll hear from a farm management analyst on the prospects of getting any crop insurance payments.
Kent Thiesse, a farm management analyst and Vice President of MinnStar bank, explains why crop insurance payment this year will be limited.
“Many areas across Iowa, Southern Minnesota, and surrounding areas are reporting above average yields. If you yields that are above your APH yield you’re probably not going to collect crop insurance. Obviously there are some parts of the region that had some challenges this year with excessive rainfall and storms.”
The established base prices this past spring for Revenue protection and Yield Protection were $8.85 for soybeans, and $3.86 for corn. The harvest prices, are based on the average CBOT price in the month of October, and December corn futures, and November soybean futures. This year, those average prices in October were $3.49 on corn, and $9.74 on soybeans. Corn is 37 cents below the spring price, while soybeans are 89 cents above the spring price.
Thiesse says, “When the harvest price is higher than the spring price, revenue protection insurance policy acts just like a yield policy.”
Thiesse explains there are a couple of reasons why the likelihood of any crop insurance payments would be more likely in corn rather than soybeans.
“The yields have been a lot more variable on corn than they have on soybeans. They have been a little more consistent yields,” said Thiesse.
For additional information visit http://www.minnstarbank.com/