How Your Federal MCPI Revenue Policy Works For You This Fall (2014)

 

With the current average prices of $3.40 for corn and $9.40 for soybeans. The projected price for both crops were $4.62 and $11.36 respectively. Due to this, your MPCI revenue policy has a chance of paying out this year. This will only occur if you do not meet your total revenue guarantee, which is a combination of the yield you had and whatever the final average price ends up being.

So, if you had a 150 bushel guarantee on corn at the $4.62 price, your revenue coverage is $693 per acre. If you do not reach your 150 bushel guarantee you will have both a production loss and a revenue loss. However, if you produced 180 bushels you still would have a loss because your revenue (based off of the current average) is only $612. $693-$612= $81 per acre loss.

This example can be used to calculate your soybean coverage as well, you will just have to replace the bushel guarantee and dollar amounts. As always, please contact your trusted Crop Insurance Agent if you feel you will have a loss of any amount due to the decrease in price or your production falls short of the bushel guarantee.

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Crop Insurance and Replant Decisions

Recent adverse weather conditions may force some growers who have already planted to replant.

If you believe replanting may in your best interest, check the replant provision in your crop insurance policy and immediately contact your insurance agent to get the paperwork started. [Catastrophic (CAT) and Area (Revenue) protection policy do not have replant provisions.] 

The following guidelines, which come from the USDA Risk Management Agency's Loss Adjustment Standards Handbook, will give you an idea of what to expect from crop insurance for replanting.   To qualify for a replanting payment:

1.     The insured crop must be hit with an insured peril (excess moisture, frost, hail, etc.).

2.     Your approved insurance provider must determine that it is practical to replant. (This is why it's best to contact your insurance agent immediately.)

3.     Acres being replanted must have been initially planted on or after the earliest planting date.  

4.     Appraised expected yield must be below 90% of the guarantee yield on acreage intended for replant.

5.     Acreage replanted must be at least the lesser of 20 acres or 20% of the insured planted acreage for the unit.  

6.     Approved insurance provider must give consent to replant. 

7.     The replanting payment will be equal to the projected price multiplied by a maximum bushel factor.  For 

2014 corn and soybean projected prices are $4.62 and $11.36, respectively. Maximum bushel factors are eight bushels per acre for corn and three bushels per acre for soybeans. 

For example, your insured corn crop was hit with excessive moisture. You planted corn on May 1, which is past the earliest planting date ofApril 10.  Appraised expected yield is now 70 bushels per acre (bpa). Actual production history (APH) is 140 bpa. You insured using a Revenue Protection policy at a 75% coverage level using the projected price of $4.62 per acre.  Your yield guarantee would be 105 bpa (140 APH yield x 75% guarantee).  Applying Rule 4 from above, 90% of your yield guarantee is 94.5 bpa (105 x 0.9).  Your expected yield of 70 bpa is less than 94.5 bpa (90% of guaranteed yield).  Consequently, you would receive a replant payment of $36.96/acre (8 bpa x $4.62, the projected price). 

From the example we can see that qualifying for a replanting payment hinges on the producer's yield guarantee.  Selection of a lower coverage level implies a lower yield guarantee and a smaller chance of qualifying for a replant payment.  However, when extreme events occur it is likely everyone will qualify for a replant payment.  If you are unsure whether you may qualify for a replant payment, your first step is to contact your crop insurance agent.

Cory Walters
UNL Extension Crop Economist

Cumulative Precipitation Forecasts 5 Day Total

Manage Your Cash Transactions In One Place

Now that you know how to add your crops to your Growers Edge account and find the best prices for these crops, you need a place to track your profit and loss.  Growers Edge makes it easy to input your cash transactions, identify which ones have been the most profitable, and measure your results against the goals you set.  Best of all, this can all be accomplished in one place: Profit Manager. 

It’s easy.  We will show you how in 4 simple steps:

1) Sign into your Grower Edge account and click on Profit Manager tab.  Here you will see your production summary table showing your crops and the best prices for these crops.  (We talked about this in our previous blog).

2) Click on the Cash Transaction tab at the top of the screen.  This will take you to the Cash Transactions menu.

3) Create a Cash Transaction.  Click on Add New Cash Transaction.   Here you can select your crop you previously entered, the number of bushels you sold, the price you sold them for, as well as when and where you sold them.  Finally, click submit.

4) Read Your Profit/Loss Statement.  To view your Profit/Loss statement click on the Profit/Loss tab in the top left of the screen.

Within your Profit/Loss statement, you can see all of the production and input details of your selected crop (left column).  You can also see the value of your sold bushels including average price per bushel and revenue per acre.  You can see your profit margin and how it compares to your target price per bushel.  This is a great resource for measuring your actual results against the goals you set at the beginning of the season.

Finally, you can also see your best cash prices for your remaining unsold bushels (bottom right).  Growers Edge shows you your best price and your local price for these unsold bushels, enabling you to get the most profit out of your remaining bushels.