Crop Insurance Minute

  In Kansas, Projected Price (PP) for wheat was set last year at $5.74.  This is based on the average July 19 KCBT daily ending price from 8/15/18 – 9/14/18.  The end of June saw the harvest price, using a daily average July 19 bid, set at $4.63.  For those using Revenue Protection (RP) or a similar revenue product this means that you could have a loss with almost 24% more yield than what was originally needed.  For example, 50bu APH at 75% coverage would trigger a loss if yield was less than 37.5 bu/ac.  Once the harvest price is factored in a loss would be triggered if yields were less than 46.5 bu/ac.  This only works with revenue products.  Yield Protection (YP) and similar yield products will only use average production x coverage level.  

     Nebraska and Missouri’s beginning PP uses the same 8/15/18 – 9/14/18 trading period as Kansas to set their price but Nebraska used KCBT’s Sept 19 (PP= $5.84) and Missouri used CBOT’s Sept 19 (PP=$5.72) price.  Nebraska and Missouri use the same trading months to set their harvest price calculated through the month of July.  So far, Nebraska is averaging $4.43 and Missouri is averaging $5.06.   Both will result in losses triggered at higher yields than using just the PP.  Especially Nebraska.