2017 Revenue Protection Insurance Projected Prices for Corn and Soybeans and Safety-Net Decisions

Todd Davis, Extension Economist, University of Kentucky
The projected prices for Revenue Protection (RP) crop insurance is established using the December 2017 corn and November 2017 soybeans futures contracts closing prices for the month of February.

Figure 1. 

2017 and Previous Years Corn Revenue Guarantee 

($/Acre) Compared to Total Variable Costs (Red line) 

and Total Variable Costs plus Rent (Black Line) at a 

150 bushel/Acre APH Yield

The 2017 projected prices for corn and soybeans are $3.96 and $10.19 per bushel, respectively. The

revenue guarantee provided by RP insurance for varying coverage levels are compared to the budgeted cost of production and the cost of production plus cash rent to analyze the risk protection provided by RP insurance.

The rainbow of colored columns in Figure 1 and Figure 2 represent the RP insurance revenue guarantees provided for the 2013 (dark blue), 2014 (dark red), 2015 (green), 2016 (orange), and 2017 (light blue) crop years. The multi-year comparison illustrates how the crop insurance safety net has declined over the last five years as ending stocks for corn and soybeans have rebuilt after the 2012 drought. The red line is the 2017 budgeted per acre input costs, and the black line is the input costs plus budgeted cash rent. The corn and soybean APH yields are 150 and 55 bushels/acre, respectively, for Figure 1 and Figure 2.