Understanding Crop Insurance Decisions Based on Historical Price Changes

When it comes to purchasing crop insurance, understanding historical price trends is crucial. Farmers typically make insurance decisions in the spring, at which point only the spring price is known. The spring price sets the initial coverage level for your crop insurance policy, but the fall price, which is determined later in the year, plays a significant role in determining the final indemnity payments if a loss occurs.

The fall price is used to calculate the revenue guarantee, and if the market price drops by the time of harvest, insurance coverage may help offset the lower revenue. Conversely, if the fall price increases, the higher revenue can result in less need for an indemnity payment. Therefore, understanding the typical changes in prices from spring to fall can help you better evaluate your crop insurance options and make informed decisions about coverage levels and types.

Below, you’ll find historical price data for corn, soybeans, and wheat. This data shows both the spring and fall prices for each year, along with the change in price. Use this information to assess trends and make more informed decisions when purchasing crop insurance, keeping in mind how price changes have historically affected revenue and the potential need for insurance payouts.