What is in this article?:
- Farmers to face lower crop insurance guarantees in 2014
- Lower Per Acre Guarantees
Futures prices on December 2014 corn and November 2014 soybean contracts are considerably below 2013 projected prices. This suggests that crop insurance guarantees will be considerably lower in 2014 as compared to 2013. As a result, most farmers will face considerable losses before crop insurance makes payments in 2014.
Likely 2014 Projected Prices
In the Midwest, projected prices for corn and soybean crop insurance contracts are set based on settlement prices of Chicago Mercantile Exchange (CME) futures contracts during the month of February. The December contract is used for corn and the November contract is used for soybeans.
In recent years, projected corn prices have been above $5.50 (see Table 1). The projected price was $6.01 per bushel in 2011, $5.68 in 2012, and $5.65 in 2013. Current futures contract levels serve as a good indicator of futures prices during the month of February. The settlement price of the December 2014 contract was $4.51 per bushel on Monday, November 18th. A $4.51 projected price for 2014 would be $1.14 lower than the $5.65 projected price for 2013.
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In the three most recent years, projected soybean prices have been above $12.50 (see Table 1). The projected price was $13.49 per bushel in 2011, $12.55 in 2012, and $12.87 in 2013. The settlement price of the November 2014 soybean contract was $11.51 per bushel on Monday, Nov. 18. An $11.51 projected price would be $1.36 below the $12.87 projected price for 2013.