NEW FOR 2023

From the FFA Creed “I believe in the future of agriculture…”

2023 is an exciting time in agriculture. We are seeing higher commodity prices and more opportunity than any other time in history. With these increased prices also has come increased input costs. Fertilizer, machinery, chemical, and fuels costs have all increased.

Crop insurance prices don’t automatically increase because the rest of the economy is seeing inflationary pressure. Premiums vary by county and are based on county loss ratios and cropland classifications. However, they are also directly affected by the guarantee price of the commodities and volatility of those markets during the discovery period. In 2022, the expected spring price for corn was set at $5.90 and soybeans at $14.33. This was calculated using the respective closes of CME’s DEC22 corn and NOV22 soybean contracts for the month of February.

For 2023, the DEC23 corn contract is trading at $5.98 and the NOV23 soybean contract is at $13.93. Regardless of where the market is today the rates will be set in the month of February as explained above.

There are many things that could affect the markets between now and the end of February. The relationship between price of corn and soybeans has historically been at 2.5:1 ratio. In other words, the price of soybeans is expected to be 2.5 times the price of corn. In the spring, the industry tries to buy acres between corn and soybeans to get to this ratio. If corn is too high traders will bid up the price of soybeans, or vice versa, to offset this difference to get the needed production for the coming year. If you look at the current spread, you will notice that beans are underpriced compared to corn at this time. This is expected to adjust as spring approaches. With the current market situation, I would guess there to be little change in premiums for 2023.

2023 Crop Insurance Changes

There are some changes in the USDA programs that will benefit producers for 2023.

With the dry conditions of 2022 many producers again recognized the need to have wheat in their operations. This fall we saw increased wheat plantings. Producers who take advantage of planting a double crop (i.e. soybeans or grain sorghum) after wheat now have the ability to obtain insurance on that crop. This procedure has been available by written agreement in the past if the producer had 3 years of double crop records. Now, you can apply for insurance if you have none or less than 3 years of double crop history. This is a huge benefit for producers needing to expand their production of feed grains or oilseeds in their operation. This change still falls under the first crop second rules, which may limit total losses between the 1st and 2nd crop until enough double cropping history has been obtained.

Our office is very experienced with this procedure and will help you tailor the program to fit the needs of your operation. If you are considering insuring your double crops, it is important to contact us early as there is important paperwork to be filed by March 15th.

RMA has also adjusted the initial plant date for soybeans through the state of Missouri. The initial plant date is now April 15th for every county. The final plant date for double crop soybeans has also been adjusted. The final plant date for full coverage is now July 5th whether you are in a county with actuarials or insure your soybeans via written agreement.

Lastly, T-Yields (county average yields) for corn have increased in almost every county in Missouri. Why is this important? T-Yields are used in your APH calculations whenever your actual harvested yields are below 60% of the county T-Yield. They are also used in calculating yield guarantees for new breaking ground, new producers, and if you begin farming in a new county.

While some of these changes may seem minor they are a good sign that RMA is moving in the right direction. If you are questioning how these rules directly affect your operation, give us a call today.

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