|
S Illinois | That's the thing, crop insurance is great for that one 2012 year, or maybe this year with lower price. It also is pretty good for higher PP areas just to keep some money coming in. But when one gets to 120bu APH ground and 75% level premiums of $25+/acre that's a significant cost for only insuring $525 of coverage. So 75 maybe 80% on low loss ratio counties is affordable on the less productive acres but where APH's are lower crop insurance is not that exceptional. One also gets into collecting on losses more than once or maybe twice every 10 year and APH's start to draw down hard and premiums rise as the loss ratio of a county is raised.
Have also seen it mentioned to just buy ECO, but when that coverage runs $50/acre on the fringe no one can afford it.
Land prices softened following 2012. Crop insurance didn't change meaningfully following 2012, but profitability sure did. Same thing the last couple of year, land prices skyrocketed as profits soared. But crop insurance didn't change. So what's driving land prices primarily. Would seem profits are still the driver. A good question to ask is when buying land, does one really ask "well what is my minimum income level at a 75% coverage level. Or what happens if all of the sudden we get 4-5 years of spring guarantees of $4. Land is going to soften with no change to crop insurance.
edit: grammar
Edited by w1891 10/19/2023 17:17
| |
|
USA 2024
