Farmers consider wheat, barley base prices for coverage
By MATTHEW WEAVER
Producers now have the prices they need to pick a risk management tool for their wheat and fall-planted barley operations.
The USDA Risk Management Agency announced in a press release the projected 2010 Crop Revenue Coverage base price of $5.55 for all wheat. The Income Protection Projected Price for all wheat is also $5.55.
The Revenue Assurance projected price, available in Idaho only, is $5.42 for all wheat.
The agency also announced in its release an additional price election for winter-seeded 2010 malting barley under Option A, at $1.40 per bushel in the Idaho counties of Cassia, Nez Perce and Payette.
Spokane-based agency regional director Dave Paul said producers should consider the prices as they contact their local multi-peril crop insurance agents before the Sept. 30 sales closing date for wheat and fall-planted barley with winter coverage.
"Producers will have to look at all their options, whether they're considering straight yield-based insurance or a revenue type of protection like a crop revenue coverage program," Paul said.
Paul said the base price is used to calculate the insurance premium in their minimum insurance guarantee in the Crop Revenue Coverage program. The guarantee can go up if the harvest price is greater than the base price when announced September 2010.
Paul said the year will be an interesting transition. The yield-based insurance price was $5.20, 35 cents off of the base price. He recommended farmers run those prices and their farm information through premium calculations when making decisions for the year.
"In the last two years we've seen both sides of Crop Revenue Coverage," Paul said. In 2008, the harvest price was about $2 higher than the base price. In 2009, the harvest price roughly $4 lower than the base price.
Ideally, producers are looking to harvest their crop and receive good value without worrying about collecting on their insurance. But Paul said the program works both ways.
"At the end of the year, knowing you have a high revenue price guarantee is comforting to growers," Paul said. "But also, knowing that in the fall you have an average price guarantee and knowing that insurance is going to go up if that price starts to climb, that's comforting as well."
Matthew Weaver is based in Spokane. E-mail: email@example.com
Crop insurance agents listed at www3.rma.usda.gov/tools/agents