The spring prices have been set for the corn and soybean revenue insurance policies.  Corn will be $5.65 and soybeans are $12.87.  

Below are the marketing floors for corn and soybeans.  It is time to plan how to market your crop.

We are in the home stretch of the price discovery period for corn and soybean revenue insurance.  The charts below illustrated the latest projected guarantees.  As of the close on Friday, February 22, Corn is at 5.682 and Soybeans are @12.944.

Below are the estimated price floors.

Here are the county yield estimates from NASS for GRIP/GRP clients.  Keep in mind that in Kentucky, payments are based on harvested acres and not planted acres.  The yields shown are for harvested acres so these figures are useful to calculate your GRIP/GRP payment.

In the counties where I have GRIP/GRP policies, this is what the crop insurance pay outs look like.  There are a lot of very large payments made on corn, against very few modest payments on soybeans.

The corn payments will be very large this year.  Below are a couple examples of how the GRIP payments are calculated.

Hardin County Corn GRIP
with Harvest Price Option – Maximum Protection

NASS reports the actual county yield in Hardin County KY at 49.6 bu/ac and the Harvest Price at $7.51

Max  Protection Per Acre Is The Higher of Base or Harvest Price=
Base Price ($5.68) X 1.5 X County Average Yield (127.8 bu) = $1089
Harvest Price ($7.51) X 1.5 X County Average Yield (127.8 bu) = $1439

Trigger Revenue=
County Average Yield (127.8 bu) X Higher of Base Price or Harvest Price
 ($7.51) X Coverage Level (90%) = $863.80

Actual County Revenue=
49.6 bushels/acre X $7.51 Harvest Price = 372.50

Loss Payment =
Trigger ($863.8) – Actual (372.50) = $491.30
You convert it to the % below the trigger revenue (491.3/863.8)= 56.9%
56.9% X 1439(max protection) = 818.79 per acre payment

 

Hardin County Corn GRIP
with Harvest Price Option – Minimum Protection

This is the same example as above, without the 1.5% multiplier.

Max  Protection Per Acre Is The Higher of Base or Harvest Price=
Base Price ($5.68) X County Average Yield (127.8 bu) = $726
Harvest Price ($7.51) X County Average Yield (127.8 bu) = $960

Trigger Revenue=
County Average Yield (127.8 bu) X Higher of Base Price or Harvest Price
 ($7.51) X Coverage Level (90% = $863.80

Actual County Revenue=
49.6 bushels/acre X $7.51 Harvest Price = 372.50

Loss Payment =
Trigger ($863.8) – Actual (372.50) = $491.30 per acre payment

We are over half way through the discovery period for corn and soybean revenue insurance.  The charts below illustrated the latest projected guarantees.  As of Tuesday, February 19, Corn is at 5.71 and Soybeans are @12.98.

With the waterfall decline in wheat prices over the last couple of months, I can understand the concern about selling new crop wheat.  As you can see from the wheat chart below, prices are very near touching the revenue guarantee of the 85% wheat RP policy.  Making sales now will only cap your upside potential because the crop insurance will protect further price declines from here on out.  It is too early to give up on wheat yet. 

The Price Discovery Period is underway to calculate the base price for corn and soybean revenue insurance for 2013.  As of today, February 11, Corn is averaging $5.78 and Soybeans averaging $13.19.  You can see by the charts below where the guarantees would get locked in at today's price levels.