Be ready for changes when you visit your crop insurance agent this year.
Bruce Sherrick, University of Illinois agricultural and applied finance professor, says farmers will face several different decisions when picking and choosing from the wide selection of insurance products and coverage options.
“You’ll notice the way you choose to elect particular options for the harvest revenue option has changed,” he says.
The introduction of the Combo policy, which coverts all historic policies to new forms of the similar forms of protection for next year, is another noted change.
Most importantly, Sherrick says, you’ll notice that most premiums are much higher. “They’re higher because commodity prices are much higher than they were last year and the volatility estimates are also much higher, even compared to 2008. So the impact is we are insuring much more valuable revenue streams.”
The exception, he says, is enterprise units, which are more comparable to last year’s costs.
The big question…how much will crop insurance cost?
“We won’t know for sure until the end of February when the projected prices have been established and the final estimates of volatility are used to create those premiums,” he says.
Listen in as Sherrick describes provides a complete crop insurance update with University of Illinois Extension’s Todd Gleason.
Sherrick presented during the 2010 Illinois Farm Economics Summit. Learn more about the Summit.
View a PDF of Sherrick’s presentation.
