Final Harvest Prices
The University of Illinois today posted on their FarmDoc Daily analysis on the final harvest price for corn and soybeans. The spring projected price for corn was $4.62 and the final harvest price was $3.49 which is about 24% lower. This means if you elected 85% RP crop insurance coverage, you will have a crop insurance payment even with up to a 13% increase in yield. For example, if you APH is 160 bushels, you will collect a crop insurance payment if your final yield is 181 bushels or less (160 * 1.13). Above 181 bushels, you will collect nothing.
Soybean spring projected price was $11.36 while the final harvest price was $9.65 which is 85% of the projected price. This results in a factor of 1:1 for 85% soybean RP crop insurance. In order to receive any soybean payment, you will need a yield loss.
The post has a very nice table letting you know the amount of yield gain you can have for corn and still collect a payment. The bottom line is if your coverage level is 75% or higher, you may still collect a payment even with a yield gain for the year over your APH.
Paul Neiffer is a certified public accountant and business advisor specializing in income taxation, accounting services, and succession planning for farmers and agribusiness processors. Paul is a principal with CliftonLarsonAllen in Walla Walla, Washington, as well as a regular speaker at national conferences and contributor at agweb.com. Raised on a farm in central Washington, he has been immersed in the ag industry his entire life, including the last 30 years professionally. Paul and his wife purchase an 180 acre ranch in 2016 and enjoy keeping it full of animals.
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