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Weekly Farm Economics

Will Soybean Crop Insurance Payments in 2018 Offset Low Prices?

July 17, 2018
Gary Schnitkey, Bruce Sherrick, and Jonathan Coppess

Trade disputes have roiled commodity markets and created substantial uncertainty about the impact on agricultural exports, especially to China. China’s response to the Administration’s proposed tariffs included tariffs on U.S.…

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Pre-Harvest Hedging and Revenue Protection

May 15, 2018
Gary Schnitkey and Jonathan Coppess

Prudent pre-harvest hedging reduces risk, particularly if it is done in conjunction with the purchase of revenue crop insurance having the Harvest Price Option (HPO) option. Recent criticism of crop…

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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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Weekly Farm Economics

Overwhelming Use of Harvest Price Option Crop Insurances

May 8, 2018
Gary Schnitkey

Over time, farmers have migrated to revenue crop insurance products with the harvest price option (HPO). Today, products with HPO are used on over 90% of the insured acres in…

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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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Farm Sizes Impacted by a $40,000 Crop Insurance Premium Support Limit

February 6, 2018
Gary Schnitkey, Jonathan Coppess, Nick Paulson and Carl Zulauf

Proposals have been made to limit the amount of Federally-paid crop insurance premiums on a per farm basis. A $40,000 limit was proposed in the last farm bill and the…

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Weekly Farm Economics

Projected Prices for 2018: More of the Same?

December 19, 2017
Gary Schnitkey

Projected prices for 2018 crop insurance policies will not be set until February for corn and soybean grown in the Midwest states. However, current levels of futures contracts provide estimates…

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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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Weekly Farm Economics

Projected and Harvest Prices in 2017

November 28, 2017
Gary Schnitkey

Harvest prices are key variables for determining payments on crop insurance contracts. In Midwestern states, 2017 harvest prices are $3.49 per bushel for corn and $9.75 per bushel for soybeans.…

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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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Weekly Farm Economics

Farmers Desires for Enterprise Units Use across County Lines

October 24, 2017
Gary Schnitkey

In a survey conducted by the Illinois Corn Growers Association, farmers with land in different counties indicated a willingness to combine insurance units across county lines. Two types of units…

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Weekly Farm Economics

An Example of Combining Margin Protection and Revenue Protection

September 26, 2017
Gary Schnitkey and Carl Zulauf

The new Margin Protection crop insurance policy can be purchased along with any COMBO product. Doing so will allow farmers to have "county" margin protection up to a 95% coverage…

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Gardner Policy Series

Farm Bill Issue Review: Crop Insurance and Cover Crops

September 21, 2017
Jonathan Coppess and Gary Schnitkey

The Illinois Nutrient Loss Reduction Strategy (INLRS) and other statewide efforts to reduce the loss of nutrients from modern farming include farmer adoption of cover cropping practices as one of…

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Weekly Farm Economics

Evaluating Payments from Margin Protection with Harvest Price Option

September 19, 2017
Gary Schnitkey and Carl Zulauf

In this article, historical payments from Margin Protection are estimated and compared to Area Revenue Protection. Both insurance contracts have the harvest price option. The example is for corn in…

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Weekly Farm Economics

Should Users of Revenue Protection Add Margin Protection?

September 12, 2017
Gary Schnitkey and Carl Zulauf

Farmers have until September 30th to determine whether to purchase Margin Protection, a new crop insurance product that provides payments when a harvest revenue-cost margin is below a guarantee set…

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Weekly Farm Economics

Margin Protection Insurance

September 8, 2017
Gary Schnitkey

Margin Protection is a new insurance product available for insuring corn and soybeans in Illinois. Some farmers may find Margin Protection beneficial. Farmers who purchase Area Risk Protection (ARP) may…

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Weekly Farm Economics

Consider Using ARP for Soybeans

January 24, 2017
Gary Schnitkey

This year, downside price risk on soybeans is a larger concern than usual. For those farmers who are particularly concerned about downside price risk, Area Risk Protection (ARP) at the…

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Weekly Farm Economics

Revenue Protection (RP) Use on Corn in the Midwest

January 4, 2017
Gary Schnitkey

Revenue Protection (RP) is the most used crop insurance plan for corn. Over time, RP use has grown to over 90% of corn acres insured in many counties in the…

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Weekly Farm Economics

2016 Harvest Prices and High Yields Imply Low Crop Insurance Payments in Illinois

November 1, 2016
Gary Schnitkey

Harvest prices used to determine crop insurance payments for corn and soybeans policies in Midwest states are based on settlement prices of Chicago Mercantile Exchange (CME) during the month of…

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2015 Estimated ARC-CO Payments

August 19, 2016
Gary Schnitkey, Nick Paulson, Jonathan Coppess and Carl Zulauf

Payments for the 2015 Agricultural Risk Coverage at the county level (ARC-CO) program will provide much needed funds for many farmers with short cash flows. At this point, not all…

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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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Use of the SCO and STAX Insurance Programs in 2015

June 30, 2016
Nick Paulson and Gary Schnitkey

The 2014 Farm Bill introduced two new crop insurance programs - the Supplemental Coverage Option (SCO) and the Stacked Income Protection Plan (STAX) for upland cotton. Both were designed to…

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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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