It is likely that a significant number of corn and soybean producers in many areas of Southern and Western Minnesota, as well as adjoining areas of Iowa and South Dakota, will qualify for crop insurance indemnity payments in 2019. Much of this region dealt with planting delays last Spring, excessive rainfall during the Summer months, and severe storms at different points during the growing season. These weather issues will likely result in yield reductions on numerous farms across the region, which together with the price declines from the crop insurance base prices on March 1, increases the likelihood of 2019 crop insurance indemnity payments for many producers.
With Federal Crop Insurance, every year is different, and with the multiple options available to producers, there are many variable results from crop insurance coverage at harvest time. The 2019 crop year will be no different, with some producers choosing Yield Protection (YP) policies (yield only) versus Revenue Protection (RP) policies (yield and price), and producers having different levels of coverage on various crops. Producers also vary on having “optional units” versus “enterprise units” for their crop insurance coverage.”
In the Midwest, most corn and soybean producers in recent years have tended to secure some level of revenue (RP) crop insurance coverage, rather than standard yield-only (YP) policies. Producers like the flexibility of the RP policies that provide insurance coverage for reduced yields, as well as in instances where the harvest price drops below initial base price. In 2019, corn crop insurance loss calculations with YP policies and RP policies will function differently, due to the likely Chicago Board of Trade (CBOT) harvest price for corn and soybeans likely being below the 2019 crop insurance base prices, which were finalized on March 1, 2019.