Several new changes for crop insurance in 2012 will allow farmers to insure more revenue per acre and/or save on their premiums.
The first major change is trend-adjusted (TA) yield, says William Edwards, Iowa State University economist. The TA yield goes back and adjusts yields higher for corn and beans on the actual production history (APH).
The TA yield is a box a farmer needs to check on the crop insurance form. The agent and company will figure the yield based on factors from the Risk Management Agency and federal crop insurance programs.
Selecting to use the TA yield likely will increase the guarantee bushels per acre for farmers, says Edwards.
He also says the higher-guarantee bushels will directly mean higher premiums as farmers insure more revenue per acre.
However, one option would be to take the TA yield and elect a lower coverage level.
“I don’t see any reason not to check the trend adjustment,” Edwards says.
The insured unit must have an actual yield for at least one year out of the last four to be eligible for the yield-trend adjustment. If actual yields are available for fewer than four years in the past 12, the annual trend-adjustment factor is reduced.
The other change is a re-rating on premiums from the Risk Management Agency.
The re-ratings were the result of the low payments on corn and soybean policies compared with insurance premiums.
Edwards says the average reduction in premiums in corn in Iowa is 9 percent and 13 percent for beans. That could help offset higher premiums due to the trend adjustment, he adds.
Farmers should be aware crop-insurance premiums will need to be paid due to federal government accounting.
The payment date also moved up one month so the government can count premiums into this year’s budget when the fiscal year ends at the end of September.
Edwards says farmers still can get a discount by electing enterprise units for the upcoming year.
The Biotech Yield Endorsement is discontinued.
Source - Iowa Farmer Today