Collected Publications for risk management • farmdoc daily

Gardner Policy Series

Premium Subsidy and Insured U.S. Acres: Differential Impact by Crop

May 11, 2018
Carl Zulauf, Jonathan Coppess, Gary Schnitkey, and Nick Paulson

Cost of Federal Crop Insurance is an on-going farm policy issue. In his Fiscal Year 2019 budget, President Trump proposed a 14 percentage point reduction in the insurance program subsidy. …

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Gardner Policy Series

Premium Subsidy and Insured U.S. Acres

March 15, 2018
Carl Zulauf Gary Schnitkey, Jonathan Coppess and Nick Paulson

Cost of Federal Crop Insurance is an on-going farm policy issue. President Trump proposed several changes to reduce its cost in his Fiscal Year 2019 budget. The changes include reducing…

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Crop Insurance per Acre Coverage: Historical Experience and Potential Issues

December 7, 2017
Carl Zulauf, Gary Schnitkey, Jonathan Coppess and Nick Paulson

A long standing goal of U.S. crop insurance policy has been to increase the share of production it covers. Over time, both the numbers of acres insured and coverage levels…

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Gardner Policy Series

Harvest Price Option: Historical Assessment

October 26, 2017
Carl Zulauf, Gary Schnitkey, Jonathan Coppess and Nick Paulson

HPO (harvest price option) crop insurance is popular with farmers but there have been several attempts to eliminate public subsidies for it. This article assesses HPO's historical performance in terms…

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Evaluating Strategic Options

July 7, 2017
Michael Langemeier and Michael Boehlje

Today's business climate for farmers is fraught with uncertainty. Making smart long-run strategic decisions in this business climate is really difficult. When the future is so uncertain, one is tempted…

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Actuarial Performance of Crop Insurance Premiums, 2001-15

January 25, 2017
Carl Zulauf andGary Schnitkey

According to the 2008 farm bill, the Federal Crop Insurance Program has a loss ratio objective of "not greater than 1.0." Thus, over time, crop insurance payments to farmers should…

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An Update on the Farm Safety Net

October 7, 2016
Michael Langemeier and Michael

In an earlier article, we projected earnings for a case farm in west central Indiana, and examined the sensitivity of earnings and farm program payments to changes in price and…

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Why is Revenue More Variable over the Growing Season in Kansas than Illinois?

July 29, 2016
Carl Zulauf, Jinsoon Lim, Sang-Hyo Kim, Vecdi Demircan, Gary Schnitkey, Kevin Herbel and Art Barnaby

This article examines why revenue is more variable over the growing season for Kansas than Illinois farms. The analysis finds that variability of yield is the primary factor associated with…

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County-Farm Loss Basis: Evidence from Illinois and Kansas Farm Management Data

July 21, 2016
Carl Zulauf, Jinsoon Lim, Sang-Hyo Kim, Vecdi Demircan, Gary Schnitkey, Kevin Herbel and Art Barnaby

Area insurance, including county insurance, is championed, particularly by economists, for several reasons including lower administrative cost and a lower potential for cheating. However, payments by area insurance can cover…

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Growing Season Crop Losses since 1978 on the Same Illinois and Kansas Farms

July 13, 2016
Carl Zulauf, Jinsoon Lim, Sang-Hyo Kim, Vecdi Demircan, Gary Schnitkey, Kevin Herbel and Art Barnaby

The potential for loss over the growing season is a key risk for crop farmers, and is the primary risk covered by U.S. crop insurance. This article takes examines growing…

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Are National Yield Declines Associated with Revenue Declines for U.S. Crops Over the Crop Insurance Coverage Period?

June 15, 2016
Carl Zulauf

The relationship between percent change in U.S. yield and percent change in U.S. revenue per acre over the crop insurance coverage period is found to vary across the 6 crops…

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Crop Insurance Premium Subsidy Rates: A Proposed Objective Metric Based on Systemic Risk

May 5, 2016
Carl Zulauf

The lack of an objective rationale for crop insurance's matrix of premium subsidy rates was one of the reasons discussed in the April 20, 2016 farmdoc daily article on why…

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Why Crop Insurance Has Become an Issue

April 20, 2016
Carl Zulauf

Considerable debate surrounds the U.S. crop insurance program, including its cost, role in farm conservation, and impact on farm management and farmland values. Objective of this article is to examine…

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Weekly Farm Economics

ARC-CO and PLC Payment Indicators for 2015 Crop Year, October WASDE

October 23, 2015
Carl Zulauf, Jonathan Coppess, Nick Paulson and Gary Schnitkey

This article presents 2015 national payment indicators for ARC-CO and PLC for barley, corn, oats, long grain rice, peanuts, sorghum, soybeans, and wheat. Except for peanuts, the estimates are based…

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ACRE Potential Payments in Historical Perspective

October 22, 2015
Carl Zulauf and SangHyo Kim

The Average Crop Revenue Program (ACRE) was the first commodity revenue program authorized by a farm bill (2008 farm bill). The 2014 farm bill redesigned ACRE into the Agriculture Risk…

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Updated Expected Price Distributions for Corn and Soybeans in 2015

August 20, 2015
Bruce Sherrick

At the end of February, RMA established Projected Prices for crop insurance contract for corn of $4.15 and for soybeans of $9.73 for insured production in 2015. The Projected Prices…

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Weekly Farm Economics

Possible Per Acre Gross Revenues for Corn in 2015 in Central Illinois

March 17, 2015
Gary Schnitkey

Possible gross revenues for corn grown in 2015 are estimated for a Logan County, Illinois farm having a 196 bushels per acre expected yield. Revenues are estimated for differing cases…

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Price Projections and Farm Bill Program Choices: Adding FAPRI-MU Projections to the Mix

February 12, 2015
Pat Westhoff

A February 4, 2015 farmdoc daily article by Scott Irwin and Darrel Good looked at the historical performance of USDA projections and futures markets in estimating farm prices for corn,…

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Early Evidence on MPP-Dairy Participation Patterns

February 11, 2015
John Newton

In January, USDA's Farm Service Agency released a State-by-State 2015 Margin Protection Program Enrollment table. Highlights of the table include the percentage of farms enrolled in MPP-Dairy, and the percentage…

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Long-Term Corn, Soybeans, and Wheat Price Forecasts and the Farm Bill Program Choice

February 4, 2015
Scott Irwin and Darrel Good

As indicated in the farmdoc daily article on January 14, 2015, many crop producers are in the process of making the farm program participation decision for the five years beginning…

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Long-Term Corn Price Forecasts and the Farm Bill Program Choice

January 14, 2015
Scott Irwin and Darrel Good

Many crop producers are in the process of making the farm program participation decision for the five years beginning with the 2014 crop. Price expectations for this five-year period play…

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MPP-Dairy Dashboard: Evaluating Milk Prices Needed to Trigger MPP-Dairy

November 5, 2014
John Newton and Marin Bozic

Due in large part to expectations for a very large crop, U.S. average corn prices have declined sharply from their highs earlier in the year. The price declines in corn…

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Basis Considerations with MPP-Dairy

September 26, 2014
John Newton

The 2014 Farm Bill created the Margin Protection Program for dairy producers (MPP-Dairy). MPP-Dairy is a voluntary and flexible program, run by the USDA Farm Service Agency, which makes payments…

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ARC-PLC Regulation and Decision Tools

September 25, 2014
Gary Schnitkey, Jonathan Coppess, Nick Paulson and Carl Zulauf

On Thursday, September 25, 2014, Secretary Vilsack announced the regulations for the Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) programs created by the 2014 Farm Bill. Along with…

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Weekly Farm Economics

Supplemental Coverage Option (SCO) in Wheat

August 5, 2014
Gary Schnitkey and Nick Paulson

The Risk Management Agency recently released information necessary to calculate Supplemental Coverage Option (SCO) premiums for wheat. In this article, the basics of SCO are illustrated with an example from…

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