In Iowa, over 90% of all insured corn acres as well as over 90% of insured soybean acres are covered by Revenue Protection or RP insurance with the harvest price option. Most farmers elected to choose the fall harvest price option instead of using the spring projected price.
Higher grain prices during the harvest period reflect summer 2012 drought
The other type of crop insurance is a Yield Protection policy. Farmers who chose to insure their crops with a YP policy may also receive a yield indemnity payment for yield loss but the loss will be paid at the February price level, which is $5.68 per bushel for corn and $12.55 per bushel for soybeans.
The higher harvest prices announced by RMA on November 1 reflect the increase in cash prices for corn and soybeans which has occurred since March as the historic drought this summer reduced the size of the 2012 U.S. corn crop as much as 4 billion bushels compared to early projections.
These harvest prices are the final piece of information needed to determine crop insurance indemnity payments farmers will get for revenue protection crop policies in 2012, says Steve Johnson, an ISU Extension farm management specialist. Farmers will be receiving their crop insurance checks sometime in the next few months. The timing as to exactly when you will receive your indemnity payment is determined largely by when you provide your yield information to your crop insurance agent. "If you haven't done that yet, do it as soon as possible," Johnson advises.
Crop insurance agents are very busy these days, but be sure to ask questions
Whenever the harvest price that's determined in October is higher than the projected spring price set during February, an insured farmer can collect an indemnity payment reflecting the harvest price. "2012 is a unique year in that we have extremely high harvest prices that will create much larger indemnity payments," says Johnson. "Anyone who has RP coverage in 2012 should be working with their crop insurance agent regarding harvest prices and collecting their indemnity payment."