|
Boone, Iowa | After Plowboy explained it to me, it started making sense again. Take your proven yield ( your crop insurance agent will have this figure ) and multiply this by your level of insurance. In my case I am going to take my example of 170 x 75% and get 127.5 guaranteed bushels. The spring established price (avg of Dec futures during Feb) which was $4.05 and multiply this by the 127.5=$513.38. At the beginning of December we will know the avg Dec futures during November and get our fall established price. I am going to use $3.00 x my 127.5 guaranteed bushels. This gives me $382.50. You will use the higher of the spring or fall amount, in this case, the $513.38 spring price. You will take your actual fall production, in your example 100 bu x $3.00 fall established price=$300. You will receive $213.38/acre on that field.
Here is an opposite scenario. Lets say our spring price is $3.00 x 127.5=$382.50. Our fall price is $4.05x127.50=$513.38. We go to the field and harvest 130 bu/acre because of dry weather. 130 x $4.05=$526.50. You are not going to get any insurance payment, since the revenue on your field was more than the highest of the two established price of $526.50. | |
|
Can someone help me figuring out crop insurance?
