- Crop Insurance premium reductions for 2014. 2014 Crop Insurance premiums for most coverage levels of corn and soybeans in the Midwest will be lower than comparable 2013 premium levels, due to lower insurance guarantees for 2014, as well as RMA premium adjustments that are based on updated crop insurance actuarial data for several years.
- There are a wide variety of crop insurance policies and coverage levels available. Make sure you are comparing “apples to apples” when comparing crop insurance premium costs for various options or types of crop insurance policies, and recognize the limitations of the various crop insurance products.
- View crop insurance decisions from a risk management perspective. How much financial risk can a producer handle if there are greatly reduced crop yields due to potential drought and weather problems in 2014, and/or lower than expected crop prices ? RP crop insurance policies serve as an excellent risk management tool for these situations. There will likely be no government farm program payments during 2014 from the new Farm Bill, as any potential payments for the 2014 crop year will not occur until October, 2015.
- In most instances, utilize the Trend Adjusted (TA)-APH Endorsement for 2014. Many producers will be able to significantly enhance their insurance protection by utilizing the TA-APH option, with only slightly higher premium costs. Using the TA-APH endorsement is a very good crop insurance strategy for most eligible corn, soybeans, and wheat producers in the upper Midwest.
- Utilizing “Enterprise Units” is generally favorable, but know the limitations. “Enterprise units”, which combine all acres of a crop in a given county into one crop insurance unit, are generally favorable to “optional units”, which allow producers to insure crops separately in each township section. “Enterprise units” usually have significantly lower premium costs compared to “optional units” for comparable RP policies. However, “enterprise units” are based on larger coverage areas, and do not necessarily cover losses from isolated storms or crop damage that affect individual farm units, so additional insurance, such as hail insurance, may be required to insure against these type of losses.
- Take a good look at the 85% coverage levels, especially when using “enterprise units” with RP insurance policies. Most Midwest corn and soybean producers will be utilizing a minimum of 80% RP coverage with “enterprise units” for 2014. In many cases, the 85% coverage level offers considerably more protection, with a modest increase in premium costs. Many producers will be able to guarantee near $750.00 per acre for corn, and near $475.00 per acre for soybeans at 85% coverage levels for 2014, when also utilizing trend-adjusted APH yields.
- Where to get more information on 2014 Crop Insurance alternatives. A reputable crop insurance agent is the best source of information to find out more details of the various coverage plans, to learn more about the TA-APH yield endorsement, to get premium quotes, and to help finalize 2014 crop insurance decisions.
Following are some very good web sites with crop insurance information: