Spring Crop Insurance Prices Favor Soybeans Over Corn

WASHINGTON, DC – New spring crop insurance prices for corn, cotton, and soybeans are at the highest levels in at least eight years, according to the American Farm Bureau Federation (AFBF). USDA’s Risk Management Agency (RMA) announced a corn price of $4.58 per bushel, an 18 percent increase from 2020 and the highest level since 2014. For soybeans, RMA set the spring price at $11.87 per bushel is the highest since 2013. AFBF suggests, using the soybean-to-corn price ratio, the highest ratio for soybeans in more than 30 years (2.59) and thus the expectation for more soybean acres in 2021. The story for cotton appears optimistic as well, with RMA setting the price at 83¢, also the highest since 2013. Higher spring prices will lead to higher revenue guarantees and may help expand farmers’ borrowing capacity going into the planting season. Also, many producers elect to purchase the harvest price option, which utilizes the maximum of the spring or harvest price to determine if a farm has suffered a loss and may assist farmers by using the replacement value of the crop if the harvest price is greater than the spring price. Given the projection for tight stockpiles moving into this season and the continued strength in U.S. exports, AFBF says the potential exists for harvest prices to increase during the growing season.
(SOURCE: All Ag News)