Farmers increase crop insurance coverage for 2014
It doesn’t get much attention outside agriculture, but a key date on most farmers’ calendars has come and gone.
March 17 was the deadline for buying or modifying crop insurance for most spring-planted crops. Farmers, working closely with their insurance agents, typically make their final decisions on 2014 yield and revenue protection crop insurance in the first two weeks of the month.
Experts interviewed after the deadline say many area farmers increased their coverage levels from a year ago.
“The tighter margin (on projected 2014 crop profits) has encouraged them to increase their coverage,” says Kent Thiesse, farm management analyst and vice president with MinnStar Bank in Lake Crystal, Minn.
Higher coverage provides more protection, but at a greater cost.
For most farmers, higher coverage levels’ additional protection justifies the higher premiums, says Andy Swenson, farm management specialist with North Dakota State University Extension Service.
Premiums have dropped from a year ago, increasing the appeal of higher coverage levels, he says.
Crop prices have fallen sharply in the past year, reducing the rate at which crops can be insured. Because crop insurance prices are lower, premiums also are lower than they were a year ago.
Dan Weber, a Casselton, N.D., crop insurance agent, says his clients typically saved a few dollars per acre on premiums this year, assuming they kept their coverage the same as a year ago.
In early March, the Risk Management Agency, the U.S. Department of Agriculture agency that administers the federal crop insurance program, released the prices at which crops raised in 2014 can be insured. The insurance prices were determined by February market prices.
Here are the per-bushel insurance prices in the Upper Midwest for the region’s three major crops:
• Wheat — $6.51 per bushel in 2014, down from $8.44 in 2013. The record price was $11.11 per bushel in 2008.
• Corn — $4.62 per bushel in 2014, down from $5.65 in 2013. The record price was $6.01 per bushel in 2011.
• Soybeans — $11.36 per bushel in 2014, down from $12.87 in 2013. The record price was $13.49 per bushel in 2011.