Corn growers will notice a couple of major changes in crop insurance for 2014. The lower price of corn and lower volatility in the market will combine to make crop insurance premiums lower for the 2014 crop, said Matthew Diersen, SDSU Extension Risk/Business Management Specialist.
Diersen added that another change is insurance will now be available for non-irrigated corn for grain in several more western counties.
"Growers in those counties now have the ability to directly insure corn using either Yield Protection (YP) or Revenue Protection (RP)," Diersen said. "Growers and insurance agents are likely aware of the general way those products work, as they have been available for wheat in those counties."
The price level for corn insurance in South Dakota is the average of the December 2014 futures contract price during the month of February. At the end of January, Diersen said that price was $4.50 per bushel, down sharply from last year.
"That lower price level means that the cost of insurance will also decline," he said. Volatility in the futures market is the other cost driver, Diersen explained.
As growers make corn marketing decisions, Diersen said it is helpful to remember that the crop insurance settles to the average of the December 2014 futures contract price during October.
