The 2020 crop insurance deadline of March 15th is quickly approaching. Before this date, a producer needs to declare the type of policy they would like to purchase or update policy option from last year. Recently, the spring 2020 price was set for soybeans at $9.17, a reduction from the 2019 spring price of $9.54. Crop insurance is a federal program to help protect a percentage of a farmer’s financial investment. As you can see from the chart on the right, projected protected income for 2020 is less than 2019. Based off these figures, a producer can build a profitable game plan to capture more yield to offset market instability.
Below are three proactive steps that should be considered before or during your meeting with a crop insurance agent.
1. Review your policy option:
- Yield Protection: The projected crop value is only based off the 2020 Projected Price. Your policy would only qualify for a claim if unit crop production falls below the established guarantee.
- Revenue Protection: The amount of insurance protection is based on the greater of the projected price or the harvest price. If the harvested plus any appraised production multiplied by the harvest price is less than the amount of insurance protection, the producer is paid an indemnity based on the difference. https://www.rma.usda.gov
2. Review the Projected Price: The Projected Price was set at $9.17/bu based off the average daily Chicago Board of Trade (CBOT) November 2020 futures price during the month of February 2020.
3. Review Unit Structure
- Basic, Optional, or Enterprise
More information can be found at the resources below:
RMA Information Reporting System (will give you a spreadsheet listing every county):
Price Discovery Tool (you can look up applicable prices, examples below):