The Risk Management Agency just released official harvest prices for federal crop insurance, and it’s not good news for farmers.
Harvest price is based on the average price during October. This year, those numbers are well below 2023 and the base prices set in February:
- Corn — $4.16 harvest price versus $4.66 base price, a 50¢ drop
- Soybeans — $10.03 harvest price versus $11.55 base price, a sharp $1.52 drop
- Grain sorghum — $4.17 harvest price versus $4.67 base price, down 50¢
- Confectionary sunflowers — down $1.50
- Oil sunflowers — dropped $1.20
The drop comes as no surprise to Tony Jesina, senior vice president of insurance, Farm Credit Services of America.
“We’ve seen the trend in play for quite a while, but in October, we did get a little bit of a bump. It could have been a lot worse,” he says. “It’s still bad enough when you think about the price of corn being down 11% from spring and beans roughly 13%. The trend has not been our friend, that’s for sure.”
Lower harvest price levels will trigger some insurance payouts for the 2024 crop, according to Randy Martinson, Martinson Ag Risk Management in Fargo, N.D.
“There’s likely going to be revenue losses in some areas on soybeans. Corn, it’s just going to depend on if you had a lot of rain and drowned out corn,” he says.
With these prices, margins will be even tighter in 2025 and, for some, maybe in the red.
Jesina says farmers need to closely manage their cost of production and safety net.
“You look at the most common policy in place and that policy will not cover your cost of production for 2025,” he says.
Most producers will need to increase their coverage under their underlying policy or add a supplement.
“A lot of producers will look at the Supplemental Coverage Option known, SCO, or the Enhanced Coverage Option, ECO. When you layer ECO and SCO on top of your underlying policy, for most producers that will be enough coverage to provide a safety net that gets close or can actually go above covering their cost of production for 2025,” he explains.
Crop insurance is not an expense to scrimp on, and Jesina recommends paying for higher coverage to help guarantee revenue. In addition, he says crop insurance products are subsidized, and the ECO subsidy went up for the 2025 crop year.
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