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2013 Crop Insurance Projected Prices, Volatilities and Harvest Price Impacts
2013-02-01 21:45:00| Corn & Soybean Digest
Source: University of Illinois farmdocDaily The Risk Management Agency (RMA) "resets" various features of the crop insurance programs annually to reflect the market's estimate of the value of crops intended for production in the current year. Among the most important factors are projected prices, volatility factors and harvest prices. Projected prices directly determine the insurable value of production, and thus impact premiums as well. The volatility factor is a measure of the price risk the market associates with potential price changes in the production year, and thus directly impacts the calculated costs of insurance. Finally, the harvest price has the potential to increase the amount of insurance coverage in effect if prices increase between the end of the projected price discovery period and the harvest price determination period. read more
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