Some last-minute flurries in corn and soybean prices this October will put a damper on 2016 crop revenue insurance claims. Federal crop insurance's 2016 harvest price guarantees settled at $3.50 per bu. for corn and $9.75 per bushel for soybeans when markets closed today, although the Risk Management Agency won't make that official until tomorrow. The spring guarantees for those crops were $3.86 and $8.85 respectively.
For corn, that's just enough to put most growers with slightly below normal yields in "no-man's land"--still paying premiums but with revenue losses too low to trigger an indemnity. On revenue products with the harvest option included, federal crop guarantees use the higher of the spring or the fall price when determining revenue calculations. When fall prices are significantly lower than spring prices, as they were in 2013, it means growers need less--or sometimes minor--yield damage to collect revenue claims.
In July, university economists thought Dec corn futures could average as low as $3 per bu. at harvest. At that price, corn growers with 80% or 85% coverage and normal yields could have collected small payments. Higher soybean prices since February meant policyholders would need to meet their normal deductibles.
In most of the country, yield reports of 10% to 30% above growers' Actual Production Histories also make crop insurance payouts largely moot this year. According to the Risk Management Agency, indemnities claimed as of mid-September totaled only $911 million nationwide, less than half the claims of a year ago and about 10% of 2014 levels.
Insurers say most of the claims so far this season are centered in northeast Indiana and parts of Kentucky, Tennessee and Ohio.
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