Crop insurance payouts may be large for 2012

U of I farm management specialist Gary Schnitkey says roughly 60% of the corn acres and 50% of soybean acres in Illinois are insured at high coverage levels with revenue products containing guarantee increase provisions.

Compiled by staff

Published: Jul 3, 2012

Farms that have purchased RP and GRIP-HR products at high coverage levels could receive large crop insurance payments in 2012, thereby offsetting crop revenue losses from lower yields. These farms may not have as low as incomes as might be expected from a yield decline, partially because of insurance payments and also because prices may increase if yields are low, as illustrated here.

Farms that do not have crop insurance at high coverage levels are more at risk for low incomes. However, price increases may offset some of potential decreases in yields. This offset assumes that not much of the 2012 crop has been already priced at what could turn out to be lower prices than during the fall of 2012. As a result, farms that did not purchase crop insurance and have hedged a great deal of the 2012 crop are particularly at risk for lower incomes in 2012.

For additional information:
http://www.farmdocdaily.illinois.edu/2012/07/crop_insurance_in_2012.html

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