The purpose of this article is to document the relationship between actual subsidy rates and loss ratios in crop insurance products, and to provide implications for policy initiatives that are…
The 2023 Harvest Prices are now set at $4.88 for corn and $12.84 for soybeans. This is a 17% decline from the $5.91 projected price for corn, and a 7% decline from the $13.76 projected price for soybeans. Because the Harvest Price is below the Projected Price for both crops, revenue policies will trigger the same payments regardless of whether they include the Harvest Price option (RP) or not (RP-HPE).
In today’s farmdoc daily article, we examine how the price discovery period for the harvest prices for corn and soybeans is currently underway. Through October 9th, settlement prices for the harvest contracts for corn (December) and soybeans (November) suggest harvest prices will be below projected prices. Lower harvest prices combined with yields at or below APH yield levels could result in substantial crop insurance indemnities for revenue products.
The farmdoc Crop Insurance section offers iFARM online tools including the Premium Calculator, Payment Evaluator and Price Distribution Tool. These tools are updated annually during the Spring crop insurance election period.