GROUP CROP insurance may make more sense this year after the USDA Risk Management Agency increased expected yields, according to Gary Schnitkey, University of Illinois Extension farm financial management specialist.
“The expected yield increases make group products more attractive and may cause some farmers to switch to group products from farm products such as Actual Production History, Crop Revenue Coverage, Income Protection and Revenue Assurance,” Schnitkey says. “Higher expected yields result in higher guarantees. Higher guarantees then increase chances of receiving insurance payments and increase the amount of payments when they occur.”
Schnitkey's full report, “Expected Yield Increases and Choice Between Group and Farm Crop Insurance,” is available at www.farmdoc.uiuc.edu/manage/newsletters/fefo06_02/fefo06_02.html.