USDA Administrator expects no major change in crop insurance costs
December 30, 2019 By Larry Lee Filed Under: Ag economy, Crops, Crops, Illinois, News, Risk Management, USDA
The Administrator of USDA’s Risk Management Agency says farmers want to know if the 2019 weather extremes will lead to higher crop insurance premiums in 2020. Martin Barbre says, “We’ve had some questions about will the tremendous amount of PP (prevent plant) in 2019 affect rates. If it does, it will be minuscule and, you know, these rates are based on years of history and one year is not going to change the premium rate that much.”
Barbre tells Brownfield crop insurance premiums are based on loss averages of up to twenty years, and the market prices. “If prices happen to work up and, you know, we get better prices and better markets, that will probably cause premiums to go up somewhat, but that would be directly in relationship to the fact that you’ve got a higher-value insure-per-acre.”
Barbre, who also farms in southern Illinois, says he had more concerns about crop insurance coverage a year ago. “Last year, frankly, I was very concerned about this time of year because I didn’t think we were going to get a very good insurance guarantee. Fortunately, prices rose during that February time frame.”
Barbre says crop insurance is based on February prices for November soybeans and December corn, and he says with soybean prices a little higher now than at this time last year, he’s hoping for better coverage in 2020.
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