The official harvest prices for corn, soybeans and sunflowers insured under a revenue protection (RP) policy have been announced. They are as follows:
|Crop||Projected Price||Harvest Price|
|Sunflowers - oil||$.169||$.176|
|Sunflowers - confection||$.226||$.236|
Because the harvest price is higher than the projected price (spring price), your bushel/pound guarantees stay the same. Any claims would be paid at the harvest prices, therefore your revenue guarantee increases.
RP Policy Loss Example – Increasing Harvest Price
Let's take a look at an example:
APH = 40 bu/acre; Coverage level = 75%
Projected Price = $9.17
Harvest Price = $10.55
Final Guarantee 40 bu/acre x 75% x $10.55 = $316.50
Actual Yield: 10 bu/acre
Calculated Revenue: 10 bu/acre x $10.55 = $105.50
RP Indemnity: $316.50 guarantee - $105.50 calculated revenue = $211.00/acre loss payment
YP Indemnity: 30 bu/acre guar – 10 bu/acre actual yield x $9.17 Projected Price = $183.40/acre loss payment
The above example compares the difference between revenue protection & yield protection (YP) claim payments. Please note YP uses the projected price only. Premium difference between RP & YP is $1 to $2 for enterprise units and $2 to $3 for optional units per acre. However, that depends on which county you farm in.
Revenue protection is a valuable marketing tool. Every year there is usually an opportunity to market your crop prior to harvest. The risk involved is that most contracts require delivery. If the crop can’t be delivered due to a production loss and the crop price has risen, the producer will have to buy grain at the higher price to fill or buyout of the contract. The harvest feature of RP allows the farmer to use a more aggressive marketing plan, because when calculating a claim, the higher harvest price is used.
Production claims should be submitted within 15 days after harvest. For unharvested crops, the deadlines are November 30th for sunflowers and December 10th for corn and soybeans. Contact your crop insurance agent asap if you suspect a claim!
Good luck to everyone wrapping up harvest and fieldwork!