Webinar to cover crop insurance decisions on winter wheat
Currently the wheat strike price for Revenue Protection is about $8.60 versus $7.14 last year. This is about a 20 percent increase over last year's crop insurance price election. This will increase the coverage about 20 percent but will also increase premium cost per acre by about 20 percent. So is the revenue protection still worth the premium costs?
This question and many more will be covered in a K-State webinar presented by Art Barnaby Jr., that is scheduled for 12 p.m. Sept. 8 to discuss the alternatives. The webinar is schedule to last about an hour, or perhaps longer if there are a lot of participant questions and comments.
The good news is a winter wheat strike price of over $8 will provide a higher minimum revenue guarantee for 2012. Given the dry conditions in the Great Plains, this is a great time to have the higher crop insurance projected price. Revenue coverage is often preferred to yield only coverage (Yield Protection) because as the price falls the deductible in RP shrinks, especially when the projected price is high.
SURE has been eliminated for the 2012 crop. Many Great Plains farmers will receive substantial payments for the 2011 drought and further north, for floods. The elimination of this program for 2012 may cause some farmers to rethink their current crop insurance coverage levels, and are those levels sufficient?
Government commodity programs and crop insurance are all derivatives of insurance and option contracts. Therefore, a cost comparison with RP versus YP will be provided based on the value of privately traded option prices. This webinar will show the possibility of how RP will reduce the risk of pre-harvest selling wheat at some these higher prices. There is also the possibility of selling part of the RP coverage in the option market.
Points to be covered in the webinar include:
1. Calculate the effective premium cost for the price protection in RP.
2. The price point where the deductible disappears in RP.
3. The impact of 2011 yield losses on the APH.
4. The total coverage reduction for the loss of SURE.
5. Evaluation of the level and type of crop insurance to purchase.
6. Evaluation of the enterprise unit discount and the type of farm it fits.
7. Possible farm bill impacts on crop insurance for 2013 and beyond.
The webinar lines are limited, so participation is based on the order of registration. There will be time to answer your questions and for you to provide comment. With a very high risk environment for both price and yield, one's 2011 wheat insurance decision may be the most important decision made by winter wheat farmers.
The registration site for the webinar is now open at http://commerce.cashnet.com/ksuagecon.
Information on the KSU AgManager website is at www.agmanager.info/events/webinars.
The cost to register is $25 per line. If your organization needs more than one line, then you will need to register and pay with a credit card more than once. If have any questions or issues with registration you may contact Rich Llewelyn at 785-532-1504 or firstname.lastname@example.org.