The deadline is March 17. There is less than 1 week to make your crop insurance decisions for 2008. Your cost of production per acre for corn and soybeans in the Cornbelt this year may be more than your gross revenue per acre last year. Should the $5 corn and $13 beans you have booked for sale be protected? USDA is offering a wide variety of crop insurance programs, but Monday is the final day to sign up.

No one can force you to obtain crop insurance, but with many reasons to use it and many types to pick from, there will be many Cornbelt farmers who will have it this year. Crop insurance will provide coverage for either loss of yield or loss of revenue, and the revenue policies have become the most popular. There are many resources on the Internet to learn about crop insurance, if you need to brush up.

What is new in 2008? The February edition of Iowa State’s Ag Decision Maker covers several issues. The first issue this year will be price sticker shock, but once you realize that you are insuring twice your typical revenue per acre, that is the reason for the higher premium rates. (Since that was written, USDA posted the price guarantees of $5.40 for corn and $13.36 for soybeans.)

What type of policy? Bill Edwards at Iowa State says, “This year they need to consider carefully the odds that prices at harvest will be higher than in February. If there is only a small chance that the market will be higher in October or November, it may not be necessary to spend the extra premium to buy CRC or RA with the harvest price option instead of basic RA.”

Amount of coverage? Consider your cost of inputs and any cash rent first to get a total of needed coverage. With the higher spring prices and your increased proven yield, your required coverage level may actually drop from last year. You can also consider the coverage as a “revenue put option” and use the insurance as a marketing tool by using a high guarantee. Doing that will increase your cost, so weigh that against a forward contract, a hedge, or a CBOT put option.

Biotech Yield Endorsement? If you have purchased YieldGuard VT Triple or YieldGuard Plus with Roundup Ready Corn 2 technologies, and are planting 75% of your corn acres with that seed, then premium discounts are available that will be about 13%.

Other resources? The University of Illinois Farmdoc website has a crop insurance section with several features.
1) The Premium Calculator is updated with the 2008 USDA information for corn, beans, and wheat in the Cornbelt, along with the Biotech Yield Endorsement for the applicable states.
2) The Payment Simulator provides insight to what you can expect from various crop insurance products.
3) Historical Payments are provided for corn and soybeans on sample Cornbelt farms.
4) “What If” Analyzer estimates your payment under various scenarios that you select.
5) Links to various University of Illinois and Iowa State University farm management newsletters which address a wide variety of crop insurance issues.

Summary:
One of the more important deadlines of the year will be March 17 which is the final date for either signing up for crop insurance or changing the type of policy used on your farm. With crop production costs that may exceed gross revenue from prior years, it is important to manage your risk of a short crop that would not enable you to pay for the production cost. Many types of decision aids and information sources are available for Cornbelt farmers to use in making that decision for 2008 crop insurance.