What’s new with crop insurance in 2008
Both traditional yield insurance (APH) and several varieties of revenue insurance will again be offered to crop producers in 2008. Last year 89 percent of Iowa’s corn and soybean acres were covered by some form of crop insurance. Revenue insurance has become the dominant type of coverage, accounting for over 85 percent of the insured acres.
Last year’s high indemnity prices of $4.06 per bushel for corn and $8.09 per bushel for soybeans allowed many producers to lock in very attractive guarantees. Indemnity prices for 2008 may go even higher, especially for soybeans. The down side, of course, is that higher prices mean higher premiums. And, despite the high value guarantees that were purchased in 2008, payouts for losses were equal to only about 4 percent of the premiums that farmers paid in.
The newest innovation in crop insurance is a premium discount for planting certain biotech corn hybrids. The Biotech Yield Endorsement (BYE) is available to corn growers in Iowa, Illinois, Indiana and Minnesota. To be eligible for a discount, farmers must plant at least 75 percent of the corn acres in an insurance unit to hybrids that contain the YieldGuard VT Triple or YieldGuard Plus with Roundup Ready Corn 2 technologies. These hybrids can be purchased from more than 250 companies that license the technology. Discounts are expected to average about 14 percent on revenue insurance policies.
, retired economist.