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SE MN | RP-HPE is a product that needs to be understood very well before purchasing it.
If you are short bushels and the price is higher in the fall than in the spring RP-HPE uses that fall price to determine your revenue so your bushel coverage declines. This can be a real problem with a short crop. For instance on a 100 bushels guarantee at a spring price of $4.66, if the fall price is $7.00 your bushel guarantee drops to 66.5 from 100. If one is absolutely certain the fall price will be lower and has the ability to withstand a lower yield with no insurance coverage if the price goes higher then it works well. If one is going to contract/hedge grain using crop insurance as a risk mitigation tool for that hedge then I would strongly caution against RP-HPE. | |
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How do I determine value of CRC RP vs YP policy
