During the next couple weeks, many farm operators will be finalizing their crop insurance decisions for the 2009 crop year. March 15 is the deadline to purchase crop insurance for the 2009 planting season. Producers need to analyze how crop insurance fits into their risk management and grain marketing strategies for the coming year.

BYE Crop Insurance Option For 2009
The USDA Risk Management Agency (RMA) has announced that the Biotech Yield Endorsement (BYE) corn crop insurance policies will be available to producers in Minnesota, Iowa and other corn-producing states on more biotech corn hybrids for the 2009 growing season. The BYE endorsement will provide a crop insurance premium discount of approximately 12-15% to corn producers who plant eligible biotech corn hybrids in 2009. Corn producers with an APH, RA or CRC crop insurance policy for 2009 can qualify for BYE, provided that a minimum of 75% of the corn acreage on a given farm unit is planted to one of the qualifying corn hybrids. Growers who use BYE must comply with Environmental Protection Agency (EPA) refuge acre requirements for the biotech corn hybrids. Growers who are interested in BYE for their 2009 corn crop insurance should contact their crop insurance agent for more details.

Enterprise Units
The USDA RMA has increased the federal subsidy for purchasing APH, CRC or RA insurance coverage under enterprise units, which combines all acres of a crop in a given county into one crop insurance unit. Many producers now use optional units, which allow them to insure crops separately in each township section. There are some substantial premium savings by switching from optional units to enterprise units. However, producers need to be aware of the limitations of insurance coverage with enterprise units. Producers should contact their crop insurance agent to better understand insurance coverage with enterprise units.

2009 Insurance Coverage
Other than BYE and enterprise units, there are very few other changes in the various types of crop insurance policies for 2009, as compared to last year. Most producers have a pretty good handle on the mechanics of standard APH (yield only) multi-peril insurance policies, compared to RA and CRC revenue coverage policies (yield and price). There has been more interest in the past couple of years in group risk income protection (GRIP) insurance policies that are based on county average crop yields and CBOT prices, due to the lower premium prices for GRIP policies. Producers need to thoroughly analyze these types of crop insurance policies with their crop insurance agent before switching from the more traditional CRC and RA-HP policies

Crop Pricing for Insurance Purposes
2009 APH market price:
Corn: $4/bu.
Soybeans: $9.90/bu.
Spring Wheat: $6.50/bu.

2009 RA and CRC base prices will be finalized on March 1. As of Feb. 23, estimates were:
Corn: $4.06/bu.
Soybeans: $8.95/bu.
Spring Wheat: $6.26/bu.

CRC and RA-HP Price Guarantee Calculations:
Corn:
Base price for CRC and RA-HP is the average settlement price for December CBOT corn futures in February.
Harvest Price for CRC is the average settlement price for December CBOT corn futures in October during the year of harvest.
Harvest Price for RA-HP is the average settlement price for December CBOT corn futures in November during the year of harvest.
Limit: The harvest price maximum for CRC and RA-HP is limited to the Base Price times 200%. (Example: $4.00/bu. base price x 2 = $8/bu. maximum.) There are no restrictions regarding downside price movement.

Soybeans:
Base price for CRC and RA-HP is the average settlement price for November soybean futures in February.
Harvest price for CRC and RA-HP policies is the average settlement price for November CBOT corn futures in October during the year of harvest.
Limit: The harvest price maximum for CRC and RA-HP is limited to the base price times 200%. (Example: $9/bu. base price x 2 = $18/bu. maximum.) There are no restrictions regarding downside price movement.

More Information on 2009 Crop Insurance Alternatives:
A reputable crop insurance agent is the best source of information to make 2009 crop insurance decisions.Following are some very good Web sites with crop insurance information:
University of Illinois FarmDoc: http://www.farmdoc.uiuc.edu/
Iowa State Univ. Ag Decision Maker: http://www.extension.iastate.edu/agdm/
USDA Risk Management Agency (RMA): http://www.rma.usda.gov/

Editor’s note: Kent Thiesse is a former University of Minnesota Extension educator and now is Vice President of MinnStar Bank, Lake Crystal, MN. You can contact him at 507-726-2137 or via e-mail at kent.thiesse@minnstarbank.com.